Increasing intergenerational transfers, including housing support for young adults and financial gifts, are having a significant impact on people’s economic prospects, according to research from the Resolution Foundation and CPC-Connecting Generations.
The Intergenerational Audit 2024, part of the ESRC-funded Connecting Generations research program, examined how family support in adulthood has changed over recent decades.
The report found that young adults are increasingly reliant on their parents for housing.
The proportion of 18 to 34-year-olds living with their parents rose from 26% at the start of the century to 39% in 2021-22.
While these ‘boomerang children’ were three-times more likely to be unemployed, they were just as likely as their independent peers to change jobs, and living at home could be linked to better job outcomes, particularly in London.
The total value of financial gifts from parents has more than doubled over the past decade to £29bn between 2018-20, up from £13.1bn in 2008-10.
More than a third of recent first-time buyers reported receiving help from family or friends.
The rise of working mothers, currently at around seven in 10, also changed family economic dynamics.
While formal childcare has expanded, grandparents also provide significant support, contributing an estimated 766 million hours of childcare in 2022-23, valued at £3.5bn based on nursery costs.
Inheritances have more than doubled in value over the past decade, rising from £83bn in 2008-2010 to £189bn in 2018-2020.
Those receiving inheritances of £50,000 or more are four percentage points more likely to retire early.
Caring for adults and elderly relatives increased as well, with unpaid care currently valued at £162bn a year.
Comparing the early 1990s to 2021-2022, the share of people caring for an adult relative for at least five hours a week has risen from 6% to 9%.
Millennials were 30% more likely to provide care than previous generations.
The research found that a working-age person became 37% more likely to leave their job once they took on caring responsibilities.
The Foundation stressed the importance of valuing adult care if the Government aims to reach its 80% employment target.
The report highlighted the unequal distribution of intergenerational transfers; wealthy families were seven-times more likely to provide financial gifts and twice as likely to leave an inheritance compared to less wealthy families.
Molly Broome, economist at the Resolution Foundation, said: “As Britain gets older and wealthier, transfers between generations are playing a greater role in shaping peoples’ economic prospects.
“Families today play a bigger role in helping young people onto the housing ladder, helping older workers off the jobs ladder and into retirement, and supporting relatives when they’re ill. These family transfers are hugely important and can be very rewarding.
“But they are not shared equally across society. Those who aren’t lucky enough to have wealthy parents often struggle to secure a home of their own or enjoy early retirement. In recent decades, expanded childcare provision has boosted parental employment.
“But the same expansion has not been seen for adult social care, which has limited employment opportunities for caregivers.
“Looking ahead, policy makers should ensure that adult care is valued as highly as childcare.”
