Lost in Neverland?
HAVING access to the Bank of Mum and Dad could be creating a Peter “Pandemic” in which adult children hook their parents into a financial Neverland by failing to leave home, says a major bank.
Suncorp Sunshine Coast general manager James McLellan said Australian Bureau of Statistics figures showed almost 50% of 18 to 24-year-olds and almost 14% of 24 to 35-year-olds were living at home, some without contributing financially.
“These young adults are living like the eternal child Peter Pan,” Mr McLellan said.
But the Moseley family of Chevallum has managed a compromise.
Lauren, 19, is working her way through a gap year before starting a degree in nutrition and dietetics at the University of the Sunshine Coast.
With full-time work as a barista, Lauren decided it was “pointless” to have to pay for rent when her parents Keith and Darlene were happy to have her stay.
With a strong family motto, “there is no such thing as a free lunch”, Lauren pays “minimal board” to contribute to the household bills, helps out with chores and cooks family meals.
The trade-off is that Lauren will pay her way through her four-year course which could cost as much as $60,000.
“My parents said there was no way they would pay my way through university, which is fair since they have put me through many years of private schooling. So this is our compromise,” she said.
Mr Moseley said it was a “natural extension” for his daughter to continue living at home.
“I think it is a very hard ask for a late teen to go and rent their own flat or save for a house deposit,” he said.
“Every family situation is different but I say if you get on well with your parents, all young people should stay at home if they help out around the house. Once they get to the mid-20s, you might want to start reviewing.”
Mr McLellan said few people realised the impact it could have on their children's financial future and their own plans for retirement.
“Parents with an empty nest will have more disposable income to pay off their mortgage or downsize their house and put more into their super.”
On the Sunshine Coast a room in a share house costs about $148 a week. If it was put away in a high-interest account paying 6% a year, it would grow to $25,280 in three years
Even if it cost parents only an additional $100 in food and bills a week to have an adult child at home, in a year that would add up to $5200
An extra $5200 a year invested 20 years leading up to retirement could boost a parent’s superannuation payout by $14,000
Source: Suncorp regional general manager for the Sunshine Coast James McLellan