meet the full nesters - Scottish Widows

MEET THE FULL NESTERS

THE CENTRE FOR THE MODERN

FAMILY HELPING US UNDERSTAND THE MODERN BRITISH FAMILY

The Centre for the Modern Family is a groundbreaking think tank, set up to examine and improve our understanding of the family in the 21st century. We know society is changing significantly – today’s families come in all shapes and sizes. And understanding how family life is changing means we’ll be able to help you prepare for a secure and prosperous future.

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Foreword

FOREWORD CAROLYN FAIRBAIRN CHAIR, THE CENTRE FOR THE MODERN FAMILY

One of the most powerful insights this study has uncovered for me personally has been the increased sense of duty and responsibility that older children living at home feel towards their parents. For many, it seems this additional helping hand into independent adult life is something to be repaid with support for their own parents when needed later in life. Indeed, the benefits aren’t only for the longer term, many full nesters report building a deeper relationship with their children as adults.

With almost half of adults aged between 20 and 24 still living at home with their parents, it will soon be the rule rather than the exception that adult children will stay at home for longer. This is not just affecting the youngest groups; with 3.3 million adults up to the age of 34 now living at home with mum and/or dad, this is clearly a trend that can extend well beyond the traditional years of education. Even that traditional ‘flying the nest’ moment in the late teens, when many will choose to head off to university, is eroding as more opt to stay at home while studying – meaning the ‘Boomerang Generation’ appears less and less likely to make it away from the nest for even a short period of time. Perhaps then, it is more accurate to identify a ‘Never-Fledged Generation’ – those whose wings have been clipped by financial and other constraints, rather than one which leaves, only to boomerang back to the nest later on.

Whatever the experience – and no doubt there are highs and lows for all those experiencing the ‘full nest’ phenomenon – one thing is for certain; there needs to be far greater appreciation of the particular set of circumstances experienced by those living in a full nest. We also need to understand the longer term impact of emerging trends such as full nesters raiding their savings or putting their retirement plans on hold while supporting their adult children. For while these steps may come with the kindest of intentions, they may expose the givers to financial vulnerability when their own needs are greatest.

We have set out in our latest CMF report to understand how children remaining at home longer into adulthood affects ‘full nesters’ – those parents providing room and board for their adult children while managing the cost of their own daily lives. We delve into the shifting dynamics of this evolving parent/adult child relationship and investigate the emotional, financial and practical pressures this exerts upon parents, many of whom are now parenting for much longer and in very different ways than perhaps they had anticipated.

As a society, we need to make sure that any interventions geared towards helping young adults take their first independent steps in life do not take for granted both the support and sacrifices of the parents. For while every full nester hopes that their ‘never fledged’ offspring will eventually spread their wings and fly, they might find that on their departure they are faced not only with a bare and empty nest, but also radically diminished nest egg with which to secure their financial future.

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Meet the full nesters

CONTENTS

PAGE 5 INTRODUCTION PAGE 8 KEY FINDINGS PAGE 9 COPING WITH A HEAVY FINANCIAL BURDEN PAGE 12 FINANCIAL LIMBO? FULL NESTERS UNABLE TO PLAN AHEAD PAGE 14 FULL NESTERS’ LEGACY OF DEBT PAGE 17 A GENERATION OF FINANCIALLY DEPENDENT ADULT CHILDREN PAGE 19 FROM FULL NESTER TO EMPTY NESTER TO HELP FROM THE KIDS? PAGE 21 CONCLUSION PAGE 22 POTENTIAL POLICY RESPONSES FOR KEY FINDINGS PAGE 23 THE PANEL

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Introduction

INTRODUCTION This report, Meet the Full Nesters, identifies the areas where these impacts are most keenly felt. Above all, it concludes that different generations are now much more likely to be depending on each other for financial, emotional and practical support. Children are living with parents for longer but also expect to be looking after their parents later in life. Grandparents may already require care, or they may still be helping out the rest of the family. Even parents whose children have left home are generally still required to offer assistance to their grown-up kids.

The legacy of Britain’s deepest recession since the Great Depression is a profound change in the dynamics of the modern family. Family generations have been forced to cling together more closely in order to weather the storm, while family relationships have been tested by the financial pressures they’ve been subjected to. Now the dust has started settling, households look very different – above all, parents are increasingly likely to have adult children still living at home with them. The Office for National Statistics says there were 3.3 million 20 to 34-year-olds living with their parents at the end of 20131.

This is the second in a series of three reports The Centre for the Modern Family is publishing this year: the first report, Family Generations and Financial Pressures, looked at how the squeeze on family finances is affecting generational relationships, while the third report will consider the key challenges facing older people.

Many of the causes for this are linked to what happened during the downturn: youth unemployment rates rose sharply, wage growth failed to keep pace with inflation and mortgage availability was poor. Other factors include the high cost of housing, both to rent and to buy. However, if the reasons why so many adult children are still living with their parents are well-known, the implications of this change in family life are less well-understood. Supporting their adult children is having a dramatic impact on parents, both in terms of their finances today and their ability to save and plan for the future.

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Large increase in 20 to 34-year-olds living with parents, ONS, 21 January 2014

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Introduction

OUR FAMILY GENERATIONS These reports focus in particular on eight key family generations and demographics – and their relationships with one another. This is not to suggest this is an exhaustive list of all the population segments in the UK today, or that everyone in the UK fits neatly into one of these categories. However, through their focus on these generations, the reports are able to go behind the scenes of the modern family – to explore the way in which financial pressures are affecting family life, from the youngest groups to the oldest, and changing each generation’s aspirations for the future.

GENERATIONAL DEMOGRAPHICS GROUPS SINGLE RENTERS Individuals living with friends in rented property.

BOOMERANG KIDS 18 to 34 year-olds still living at home with parents.

COHABITING COUPLES Cohabiting and married couples without children.

PARENTS WITH SCHOOL-AGED CHILDREN Parents with children under 18 at home.

FULL NESTERS Parents with grown-up children (over 18) who are still living at home.

EMPTY NESTERS Parents with grown-up children (over 18) who have left home.

GRANDPARENT CHILD-CARERS Grandparents providing childcare for family members.

FAMILY CARERS Individuals providing regular care and support for a relative.

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Introduction

ABOUT THIS RESEARCH The panellists are:

This report is based on both quantitative and qualitative inputs, including a YouGov survey of 2,000 adults, constituting a representative sample of people across the UK, and a series of focus group sessions, also conducted by YouGov. These inputs were subsequently analysed and debated by The Centre for the Modern Family panellists in both group discussions and individual interviews.

• Samantha Callan, Associate Director for Families and Mental Health, Centre for Social Justice • Professor Sir Cary Cooper CBE, Distinguished Professor of Organizational Psychology and Health, Lancaster University Management School • James Daley, Founder, Fairer Finance • Liz Fraser, Parenting Author • Reverend Jeremy Fraser, Curate in the East Greenwich Team Ministry in the diocese of Southwark • Emily Holzhausen, Director of Policy and Public Affairs, Carers UK • Jane Humphries, Professor of Economic History, Oxford University • Sarah Jackson, Chief Executive, Working Families • Richard Jones, Director of Annuities and Protection Propositions and Bancassurance for the Insurance Division of Lloyds Banking Group • Neil Leitch, Chief Executive, Pre-School Learning Alliance.

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Key findings

KEY FINDINGS 1 FULL NESTERS BEAR A HEAVY FINANCIAL BURDEN Full nesters are taking a significant financial hit from having their kids at home, just when they might have expected to have more spare cash to enjoy life. Almost one in two (47%) has had to cut down on leisure spending, savings are being eroded and many families are finding it tough to balance the household budget.

2 PROVIDING FOR A FAMILY MAKES IT TOUGH TO PLAN FOR THE FUTURE Full nesters are living for the here and now, with just one in four (25%) able to prioritise planning for the future. Their children, by contrast, are able to plan ahead thanks to their parents’ support, with 42% focusing on future plans.

3 DEBTS ARE MOUNTING Full nesters are much more likely to have almost every type of debt than other demographic groups – four times as many full nesters have credit card debt as empty nesters, for example. Anxiety about those debts is rising, with people feeling ashamed and a growing sense that their finances are out of control.

4 CHILDREN OF FULL NESTERS REMAIN FINANCIALLY DEPENDENT Almost two-thirds (62%) of full nesters are providing their children with financial support. In general, full nesters are happy to help, but tensions exist – the boomerang kids are unhappy about having to borrow from parents and some full nesters are also discontented.

5 INTRA GENERATIONAL RELATIONSHIPS WILL EVOLVE Full nesters expect to become empty nesters one day, with boomerang kids more positive about home ownership prospects than those who are renting. The payback for help today may be children will care for their parents in later life should the need arise – 52% of boomerang kids regard this as repayment for the support they have enjoyed.

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Coping with a heavy financial burden

COPING WITH A HEAVY FINANCIAL BURDEN Large numbers of full nesters are suffering financially as a result of having adult children living with them in the family home. They are far more likely than empty nesters, with no children living at home to support, to have had to adopt coping strategies, often resorting to drastic measures to manage higher living costs, such as cutting back on every day costs.

Moreover, it is not only discretionary spending that is coming under pressure. A third of full nesters (35%) have switched to a cheaper supermarket, compared to only 29% of empty nesters and just 16% of boomerang kids. More seriously, almost one in 10 full nesters (9%) says financial pressures have forced them to skip meals, compared to one in 20 empty nesters (5%).

The full nesters are also much more likely to have taken these actions than the boomerang kids who live with them. Thanks to the support of parents, compared to other demographic groups, boomerang kids consistently report that higher living costs have had less impact on them.

These pressures are also having a profound effect on full nesters’ ability to save for the future. 30% are contributing less to savings, while 28% are spending the money they have already set aside. This is worrying given that many full nesters are in their 40s and 50s – the period when savers have traditionally been able to maximise savings such as pension contributions.

Almost one in two full nesters (47%) has cut back on leisure spending over the past 12 months, compared to 38% and 28% of empty nesters and boomerang kids respectively. For a social group that might have been hoping to put themselves first by now, this is disappointing and potentially stressful.

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COPING WITH A HEAVY FINANCIAL BURDEN FULL NESTERS ARE BEARING THE FINANCIAL BRUNT OF STILL HAVING CHILDREN AT HOME – THEY ARE FARING THE WORST IN ALMOST EVERY AREA THINGS PEOPLE HAVE HAD TO DO IN THE PAST YEAR AS A RESULT OF HIGHER LIVING COSTS Contribute less to savings

Spend my savings

25% 30% 17%

27% 28% 18%

Start to shop at cheaper supermarket

Switch to value brands

29% 35%

24% 33%

16%

12%

Cut down on vital spending e.g. travel costs, groceries

Go to a friend or relative for financial support

21% 31% 17%

4% 11% 7%

Cut down on leisure spending

Skip meals

38% 47% 28%

5% 9% 12%

Work extra hours/take a second job

Sell valuables

4% 8% 6%

6% 11% 7%

Take out loan, spend on credit cards, or go overdrawn 7% 16% 5%

Empty nesters Full nesters Boomerang kids

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WHAT THE CMF PANELLISTS SAY needs to be both increased and better enforced, which means more resources for enforcement. Plus the design of Universal Credit needs to be further improved, to ensure work really does pay.”

Full nesters need more help as they struggle to cope with the cost of providing for both themselves and their grown-up children, says James Daley, the founder of Fairer Finance. “The full nesters are the group in society that currently need the most support. During the past few years, the financial pinch on this group has been compounded by the fact that real wages have been decreasing.”

For Professor Sir Cary Cooper CBE, Distinguished Professor of Organizational Psychology and Health at Lancaster University Management School, the danger of failing to intervene is that pressure will continue to pile up on families – and full nesters in particular – until it becomes too much to bear. “The intra-generational issues here are really significant,” Cooper says. “Many full nesters are now having to work longer hours, or even into retirement, as well as to make big sacrifices because their kids need them – that is a very heavy load to carry.”

For this reason, Sarah Jackson, Chief Executive of Working Families, believes both employers and policymakers must do more to help this group – she too believes that low wages are compounding the misery for many full nesters. “We need to see more employers adopting the living wage2 and the Government should take an active role in making this happen,” Jackson argues. “In addition, the national minimum wage

WHAT OUR FAMILIES SAY “Having the children here has definitely impacted on my finances because the bills are so much higher; I can barely afford to support myself.”

“We look out for more deals on everything, and we certainly haven’t been on as many holidays.” Michael, 48, Northern Ireland, full nester

Sharon, 55, London, full nester

“Having children still at home has really limited the amount of disposable income my wife and I have.”

“It is so hard at the moment for most people under 30, unless you’re lucky enough to have a little help from family.”

Michael, 56, Eastern England, full nester

Rosie, 26, Essex, boomerang kid

“For me, the minimum wage doesn’t get me a decent place to live where I don’t have to share with strangers.” Jenna, 23, North-West England, boomerang kid

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The wage that people can live on to have an acceptable quality of life

Financial limbo? Full nesters unable to plan ahead

FINANCIAL LIMBO? FULL NESTERS UNABLE TO PLAN AHEAD nesters as empty nesters have to focus on paying off debt – and more than a third (36%) don’t expect to ever be able to repay what they owe.

By this stage of their lives, many full nesters expected to be enjoying a higher standard of living, with more disposable income and the opportunity to begin focusing on future financial goals, such as saving for retirement. Instead, the costs they are enduring because they still have adult children living at home are forcing them to live in the here and now.

These full nesters are putting their own futures on hold so that their children don’t have to. While their parents struggle, 42% of boomerang kids are able to focus on preparing for the future, 28% are prioritising saving to buy a property, and 39% are able to concentrate on progressing in their careers.

Some 44% of full nesters say they are currently focused on providing for their families, compared to only 23% of empty nesters. Twice as many full

FULL NESTERS ARE TAKING THE HIT BY PAYING OFF DEBT AND PROVIDING FOR THEIR FAMILY, WHILE THEIR CHILDREN PRIORITISE LOOKING AHEAD TO THE FUTURE AREAS OF CURRENT FOCUS Preparing for the future

Gaining an education

24% 25%

1% 2% 42%

29%

Paying off debt 36% of full nesters do not think they will ever get out of debt

Progressing my career

17%

2% 7%

34% 9%

39%

Saving to buy a property

Spending time with the family

1% 3%

37% 42% 28%

14%

Providing for the family 23% 44% 4%


All parents want the best for their children, of course, but few will have expected to still be making these sacrifices for adult offspring. For many full nesters, the long-term effects of these difficult times – a lack of savings or high debt – will endure even after their children are finally able to leave the family home.

By contrast, empty nesters do not have to make these difficult trade-offs – or at least they do not face the costs of still having children at home. Still, fewer than one in four empty nesters (24%) are focusing on preparing for the future. That may hint at another reality which will eventually confront the full nesters too – that even when children are finally able to move out of their parents’ homes, they will continue to look to mum and dad for financial support. 12

Financial limbo? Full nesters unable to plan ahead

WHAT THE CMF PANELLISTS SAY Moreover, Professor Sir Cary Cooper CBE says the evidence of the survey is that it’s not only full nesters who are affected by an inability to think about the future. “We should not overlook the problems faced by empty nesters who clearly are supporting their children financially too,” he states.

For the Reverend Jeremy Fraser, who works with a range of community groups in Southwark in South-East London, the problems affecting full nesters are visible every day. He worries that society is ill-equipped to cope with the changing nature of the family because these trends have not been seen before – or at least not in living memory. “This is the first generation of full nesters, so we don’t fully understand what this will mean for their futures,” Fraser says. “In many families, the full nesters are people who set up on their own as soon as they left university or got their first job, so they have no experience of how families cope with the financial pressures and other strains of living together for so much longer.”

Sarah Jackson warns that both empty and full nesters will also be confronted by another problem that could prevent them thinking about the future for an even longer period. “They will go on to become grandparents who look after their grandchildren. We will need to look into the extent that the finances of full and empty nesters can take the hit of reducing hours – this will effectively be yet another financial subsidy from parent to child.”

WHAT OUR FAMILIES SAY “I am in a position where if one branch breaks, such as losing my job, I will really hit the ground hard and break something.”

“I’m just focused on staying on top of food bills and energy prices, and have no time to think about anything else.” Michelle, 52, Yorkshire, full nester

Michael, 48, Northern Ireland, full nester

“In the next five years I hope to still be able to provide for my family by working. In 10 years I hope I will be able to think about retiring with my children having their own lives.”

“I think of myself as moving up but not quite getting anywhere yet: I’m figuring out the next move and how to take it.” Jenna, 23, North-West England, boomerang kid


“Sometimes it does feel pretty hopeless – like I’m going to be stuck in the same situation forever.” Michelle, 30, boomerang kid

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Full nesters’ legacy of debt

FULL NESTERS’ LEGACY OF DEBT Full nesters are using a range of different types of credit in order to cope with the financial pressures they face – in each case they are much more likely to have debt than empty nesters or their boomerang kids (the only exception being student debt, for understandable reasons).

WHAT TYPE OF DEBT DO FULL NESTERS CARRY OVER EACH MONTH?

36%

14%

Credit card

13%

Bank overdraft

Car loan

13%

6%

Store card

Loans from friends/family

By contrast, while empty nesters and boomerang kids face financial pressures too, they have not been forced into borrowing anywhere near so widely. Just 21% of empty nesters have credit cards, for example. And less than half as many empty nesters have store card debt or a car loan as full nesters.

FULL NESTERS SURPASS EMPTY NESTERS ON EVERY TYPE OF DEBT Credit card

Store card

21%

3%

36%

13%

8%

1%

Student loan

Loans from friends/family

1% 4%

2% 6% 4%

36%

Bank overdraft

Other bank loan

9% 14% 8%

4% 8% 0%

Car loan 5% 13% 5%


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Each demographic in this survey reports being concerned about borrowing, though the lower indebtedness of empty nesters appears to translate into a lower level of anxiety. Significant numbers of both groups – 43% in each case – also say they feel ashamed to be in debt. There are disparities in attitudes towards debt between all types of parents with grown-up children living at home – but full nesters feel the least in control as a result of their debt.

ATTITUDES TOWARDS DEBT

34%

74%

43%

74%

43%

68%

I am ashamed to be in debt.

Being in debt is something that concerns me.

70% 59% 68%

Despite being in debt, I feel in control of my financial situation.


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WHAT THE CMF PANELLISTS SAY However, Professor Sir Cary Cooper CBE warns that while debt may not be something young people currently worry about, that may change if and when the cost of servicing borrowing starts to rise. “When interest rates begin to rise, debt may create serious financial difficulties,” he warns.

The burden of debt has many implications. Parenting author, Liz Fraser, worries about the impact on full nesters and others who feel ashamed about what they owe. “One of the words that crops up is guilt, so how does that affect people emotionally?” she says. “Does it put an emotional and health stress on people and what does that mean for the family?”

“Many families will be unable to cope.”

Neil Leitch, the Chief Executive of the Pre-School Learning Alliance, says the research findings that debt is considered less shameful among younger people are a particular concern. “We know from the banking sector that actually the younger generation does not have a problem with using a credit card,” he says. “Borrowing is just not really an issue for them.”

WHAT OUR FAMILIES SAY “I would hate my children to be in serious debt and I would try to help as much as possible even if it might leave me in trouble financially.”

“We are on a debt management plan and have been for three years so far.” Michelle, 52, Yorkshire, full nester


“I would have been able to manage my debts better if my children were not so dependent.”

“It doesn’t matter what I do or where I go now, I’ll always be in debt.” Jenna, 23, North-West England, boomerang kid


“Debt is not shameful, unless you lose control.” Ross, 25, London, boomerang kid

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A generation of financially dependent adult children

A GENERATION OF FINANCIALLY DEPENDENT ADULT CHILDREN There is no doubt that the way financial links between parents and children now endure for so much longer is changing the dynamic of the modern family, imposing new strains and stresses. For example, almost one in two boomerang kids (46%) feel unhappy about having to borrow money from their families, having hoped they would be standing on their own two feet by now. And while 63% of full nesters are happy to lend money to help out their children, more than one in 10 (11%) say such arrangements have caused tensions in their families.

Full nesters aren’t just providing their children with a roof over their heads; many are also providing financial support. Almost two-thirds of full nesters (62%) are supporting their children financially – whether that’s by letting them live at home rent-free, not charging them for household bills, or loaning, or even gifting them money. Empty nesters are also often to be found providing financial support to their children, underlining the way in which many children continue to depend on parents even after leaving home. Still, at 37%, the proportion of empty nesters facing this cost is significantly lower.

Interestingly, slightly fewer empty nesters (57%) are happy to lend money to their families – their relative discomfort may be that they did not expect their children’s financial dependency to continue once they left home.

PARENTS PROVIDING FINANCIAL SUPPORT TO THEIR CHILDREN

37%

62%

Empty nesters

Full nesters

Full nesters are significantly more likely to be supporting their children financially than empty nesters

27%

46%

11%

63%

of boomerang kids have borrowed money from their parents.

of boomerang kids feel unhappy about borrowing money from family members, as they had hoped they would be able to provide for themselves.

of full nesters feel that borrowing money from family members has caused tension in their family.

However, 63% of full nesters are pleased to lend the money to help their family members out, compared to 57% of empty nesters.

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A generation of financially dependent adult children

WHAT THE CMF PANELLISTS SAY As for property purchase, Liz Fraser says younger Britons may just have to embrace the mentality that is prevalent in continental Europe, where renting rather than buying is much more the norm. “Yes, fewer and fewer young people are able to afford to buy their own homes, but does that actually matter?” she says. “Do they care or are they happy to rent?”

Neil Leitch, Chief Executive of the Pre-School Learning Alliance, believes the research findings may even understate the extent to which parents are supporting adult children. “I think the frequency of lending is an issue,” he adds. “If the children are coming back for more, month after month, that’s quite critical, because it effectively represents a lifestyle.” For Jeremy Fraser, the extent of the boomerang kids’ financial dependency is closely connected with the state of the labour market following the recession. “What we’re finding is that young people, when they’re going into work, are only getting part‑time jobs,” he says. “They’re often on zero hours contracts and they may simply not be earning enough to pay rent.”

WHAT OUR FAMILIES SAY “I don’t give my children money but they don’t pay me either – I put a roof over their heads and they get free utilities.”

“I provide support for my daughter as she is still in education. We ask for rent from my sons as they are working, but nowhere near as much as if they lived by themselves. I’m happy to provide money as long as they aren’t taking advantage of me and my wife.”


Michael, 48, Northern Ireland, full nester

“We don’t take anything from our son, so we pay all the utilities and food bills.” Michelle, 52, Yorkshire, full nester

“My family pay for all the necessities such as food, accommodation and bills, and then I’m in charge of my personal finances.”

“My parents will lend me money if I need it – they recently gave me a little towards fixing my car as they know I am trying to save for a mortgage and they are willing to lend me part of the deposit for a house.”

Razia, 20, boomerang kid

Jessica, 30, Lincoln, boomerang kid

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From full nester to empty nester to help from the kids?

FROM FULL NESTER TO EMPTY NESTER TO HELP FROM THE KIDS? On the other hand, full nesters are realistic about how that first purchase is likely to become a reality – 41% believe their children will need financial assistance in order to buy a property and 25% say they feel under pressure to help out in this way.

The good news for those full nesters anxious to wave their children goodbye is that adults under the age of 34 living at home are more confident than single renters about their prospects of eventually getting on to the property ladder, albeit by a small margin.

THOSE UNDER 34 LIVING AT HOME ARE MORE POSITIVE ABOUT THEIR PROSPECTS OF BUYING THEIR OWN HOME INDEPENDENTLY THAN THOSE LIVING IN RENTED ACCOMMODATION

ATTITUDES TOWARDS BUYING YOUR FIRST HOME

I believe that eventually I will be able to buy my own house on my own 34%

32%

I believe that eventually I will be able to buy my own house with the help of family members 27%

16%

Boomerang kids

Single renters

Moreover, parents may have to wait longer than they expect for their children to buy – boomerang kids think 27 is the appropriate age at which to buy a first home, while their parents say 25. In fact, both groups may be unrealistic, with some research now suggesting the average age of a first-time buyer in the UK is as high as 363.

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However, while full nesters may have to wait some time to get the children off their hands, they may find there are benefits in the future. More than one in two boomerang kids (52%) believe that providing their parents with support in later life is a way to repay them for the help they are currently offering. Almost one in five boomerang kids (18%) expect their parents to move in with them later in life.

First-time buyers need more help to buy, MoneySuperMarket, 29 May 2014

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From full nester to empty nester to help from the kids?

WHAT THE CMF PANELLISTS SAY Samantha Callan says these trends represent a new way of thinking and a marked change in the way families have operated in recent times. “A lot of modern welfare state theory is underpinned by the idea of ‘defamilialisation’ – the idea that you shouldn’t need to depend on your family to survive – but this data turns that around. We’re now seeing this potentially very small gap between leaving home at, say, 34 and your parents needing you at 50; perhaps whole populations are beginning to be inter-dependent in a way they just weren’t prior to the financial crisis.”

important not to romanticise the idea of families coming together to support each other – not everyone will want or be able to live this way, she explains. “Whether I wish to live with my children in the future or not, I think I should be in control of that decision rather than having it dictated by my child,” she says. “In any case, given the expense of the property market, in many areas of the country, multi-generational households simply won’t be possible – it’s not as if you can suddenly upsize when you need to accommodate children and grandparents.” Housing and benefit policy also mitigates against people having additional rooms into which people might move family members, she points out.

However, Emily Holzhausen, Director of Policy and Public Affairs at Carers UK, warns that it is

WHAT OUR FAMILIES SAY “I didn’t expect my children to move out the moment they turned 18 but I did think they would be more independent and be moving towards a place of their own.”

“It makes financial sense for children to live with their parents until they are in a steady job and earning a steady income.” Michael, 56, Eastern England, full nester


“Sometimes I think my son is the adult and we are the children; he can be quite opinionated.”

“I expect to be caring for my parents and supporting them financially if required; they have done it for me up until now.”

Michelle, 52, Yorkshire, full nester

Nicky-Ray, 27, Glasgow, boomerang kid

“I think I owe my parents to ensure they are well looked after in their old age.” Rosie, 26, Essex, boomerang kid

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Conclusion

CONCLUSION Still, the children of the full nesters recognise that their parents are making significant sacrifices to help. Many feel uncomfortable asking for such support, but boomerang kids are also clear that they intend to repay the help they have received if they possibly can – many expect to be caring for parents in later life, for example.

The research suggests that the nature of the modern family is changing amid the financial pressures in Britain today. With adult children now much less able to stand on their own two feet financially – and with rents and house prices continuing to rise more quickly than earnings – many more are dependent on their parents, and many more continue to live in the family home for far longer than they or their parents would once have expected.

In that context, the full nester phenomenon may prove to be just part of a wider societal change, with families offering each other greater support throughout their lives – and each generation taking its turn to support the others.

The group most affected by this trend is the parents whose adult children have yet to move on. These full nesters are shouldering a heavy financial burden, are more likely to be in debt than empty nesters whose children have moved out, and have little prospect of immediate respite.

This is not to suggest that groups such as full nesters and boomerang kids see some sort of silver lining in the cloud of difficulties they’re now confronted with – or that policymakers have no need to look for ways to intervene in order to provide support and assistance to relieve the strain. Without such interventions, the burdens on many families may prove intolerable.

At the same time, these trends are changing the dynamic of the modern family. Full nesters may be adversely affected by the support they continue to give their adult children, but in most cases they do not resent helping in this way – many people in our focus groups also speak warmly about how they enjoy living with their grown-up kids.

Nevertheless, some of the ways in which the modern family is changing will be welcomed by many people. And under-pressure full nesters can at least take solace from the idea that the support they offer will be appreciated and even reciprocated.

On the other hand, a small but significant number of full nesters do feel unhappy about how much support they must offer their children. And this resentment may grow as the implications of the inability of full nesters to plan for the future, because of their current financial circumstances, become clear.

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Potential policy responses for key findings

POTENTIAL POLICY RESPONSES FOR KEY FINDINGS 1

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FULL NESTERS BEAR A HEAVY FINANCIAL BURDEN

CHILDREN OF FULL NESTERS REMAIN FINANCIALLY DEPENDENT

Full nesters are taking a significant financial hit from having their kids at home just when they might have expected to be enjoying life – almost one in two (47%) have had to cut down on leisure spending, savings are being eroded and many families are finding it tough to balance the household budget.

Almost two-thirds (62%) of full nesters are providing their children with financial support. In general, full nesters are happy to help out, but tensions exist – kids are unhappy about having to borrow from parents and some full nesters are also discontented.

POLICY RESPONSE

How can we better support both full nesters and children living at home? For example, would encouraging employers to support the ‘living wage’ for younger workers be helpful?

POLICY RESPONSE

Given the increase in adult children living at home, how can we encourage parents and children to talk about the financial and emotional realities of how to make this work?

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2

INTRA GENERATIONAL RELATIONSHIPS WILL EVOLVE

PROVIDING FOR A FAMILY MAKES IT TOUGH TO PLAN FOR THE FUTURE

Full nesters expect to become empty nesters one day, with children living at home more positive about home ownership prospects than those who are renting. The payback for help today may be that children will care for their parents in later life should the need arise – 52% of boomerang kids regard this as repayment for the support they have enjoyed.

Full nesters are living for the here and now, with just one in four (25%) able to prioritise planning for the future. Their children, by contrast, are able to plan ahead thanks to their parents’ support, with 42% focusing on the future. POLICY RESPONSE What more can be done to provide financial advice for those approaching retirement? Consumers and pension providers are already facing major changes in the coming year, but having children staying at home is now a major factor that needs to be considered.

POLICY RESPONSE Can we change the emphasis of housing and benefits policy, in both the public and the private sector, to provide better support for large families consisting of several generations who are looking to live together?

3 DEBTS ARE MOUNTING Full nesters are much more likely to have almost every type of debt than their children or the empty nesters – four times as many full nesters have credit debt as empty nesters, for example. Anxiety about those debts is rising, with people feeling ashamed and a growing sense that their finances are out of control. POLICY RESPONSE Could we provide better advice and counselling for those struggling with debt – and provide more education to young people who may not understand the implications of rising interest rates? 22

The Centre for the Modern Family Panel

THE PANEL CAROLYN FAIRBAIRN LLOYDS BANKING GROUP, CHAIR, CENTRE FOR THE MODERN FAMILY Carolyn Fairbairn is a non-executive director of Lloyds Banking Group and of The Vitec Group. She served as a non-executive director of the Financial Services Authority (FSA) between 2008 and 2011 and was Chair of the FSA’s Risk Committee from 2010 – 2011. Until April 2011, she was Director of Group Development and Strategy at ITV plc, having also spent eight years at the BBC including five years as Director of Strategy and a member of its Executive Board. She has also been a partner at McKinsey & Co. and a policy adviser in the Prime Minister’s Policy Unit. Carolyn began her career as an economist at the World Bank. In January 2012, she was appointed a trustee of Marie Curie Cancer Care.

SAMANTHA CALLAN ASSOCIATE DIRECTOR FOR FAMILIES AND MENTAL HEALTH, CENTRE FOR SOCIAL JUSTICE Dr Samantha Callan is recognised as a research and policy expert in the field of family relationships and work-life integration. She has acted as a research consultant to major non-governmental organisations aiming to strengthen family life. In this capacity she chaired the Family Breakdown Working Group of the Social Justice Policy Commission and the Family Law Review and Early Years Commission for the Centre for Social Justice. She was previously the Family and Society Policy Adviser in the Conservative Policy Unit. She has recently completed a major review on mental health which was unusual in emphasising the importance of the family.

PROFESSOR SIR CARY COOPER CBE DISTINGUISHED PROFESSOR OF ORGANIZATIONAL PSYCHOLOGY AND HEALTH, LANCASTER UNIVERSITY MANAGEMENT SCHOOL Sir Cary Cooper is Distinguished Professor of Organizational Psychology and Health and is Chair of the UK’s Academy of Social Sciences, an umbrella body of 41 learned societies in the social sciences, comprising over 87,000 social scientists. Sir Cary is former Chair of The Sunningdale Institute, a think tank on management and organisational issues, in the National School of Government (2004-2009). He was also the lead scientist to the UK Government Office for Science on their Foresight Programme on Mental Capital and Wellbeing (2007-2009).

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JAMES DALEY FOUNDER, FAIRER FINANCE James Daley has been a consumer campaigner and financial journalist for the past 14 years. Before launching Fairer Finance, he worked for the consumer group, Which?, where he campaigned for a better deal for customers of banks and insurers in the wake of the financial crisis. Before working at Which?, James spent five years as a business and finance journalist at The Independent newspaper, latterly as the paper’s personal finance editor and cycling columnist. He lives with his wife and daughter in Tooting, where he is also a local councillor.

LIZ FRASER PARENTING AUTHOR Liz Fraser is the best-selling author of three parenting books, a family commentator on BBC Breakfast News, ITV1’s Daybreak and This Morning, Sky News and many others, and a BBC Radio presenter. A Cambridge science graduate and mother of three, Liz is currently writing her fourth book, and was author of the inaugural report Family published in 2011.

REVEREND JEREMY FRASER CURATE IN THE EAST GREENWICH TEAM MINISTRY IN THE DIOCESE OF SOUTHWARK Reverend Fraser is a curate in the East Greenwich Team Ministry in the diocese of Southwark. Jeremy is Chair of the Olympic Group for the diocese and Co-ordinating Chaplain of the multi-faith chaplaincy based around the 02. He is also a Non-Executive director on the local NHS Board. As well as serving his parish, he is an Honorary Chaplain to two local schools. In one of these schools Reverend Fraser mentors young men who are not yet in the criminal system but are heading that way. Before being ordained, he had a career in business and politics and is the former Labour leader of Southwark Council. He is currently a board director at a PR agency.

EMILY HOLZHAUSEN DIRECTOR OF POLICY AND PUBLIC AFFAIRS, CARERS UK Emily has worked at Carers UK for the last 16 years, where she is responsible for UK and England strategic development and direction of policy, research, campaigning, parliamentary, media and advice and information provision and Carers Week, one of the UK’s biggest awareness weeks. Her team includes the advice service for carers and she is also responsible for Carers Rights Day. Emily has developed and led different campaigns over the years which have resulted in new legislation, policy or practice to improve the lives of carers. For example, the Caring on the Breadline campaign led to the first major package of carers’ benefit changes in 15 years. She had led campaigns on two successful Private Members’ Bills giving carers new rights: Carers and Disabled Children Act 2000 and Carers (Equal Opportunities) Act 2004 and has provided evidence and advice to the Law Commission’s review of social care law. Over her career she has carried out or commissioned over 30 pieces of research, bringing more insight and understanding about the lives of families caring for someone with a disability or chronic illness.

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SARAH JACKSON OBE CEO, WORKING FAMILIES Sarah has been involved in work-life balance campaigning and culture change since joining Parents At Work in 1994, and is an acknowledged expert in the field. Leading Working Families’ policy and parliamentary work, she is the charity’s key media and public spokesperson on all aspects of work-life balance. In 2007, Sarah was awarded an OBE in the Queen’s Birthday Honours List for services to Quality of Life Issues. Sarah does not work full-time; flexible hours give her time to enjoy family life.

RICHARD JONES DIRECTOR OF ANNUITIES AND PROTECTION PROPOSITIONS AND BANCASSURANCE FOR THE INSURANCE DIVISION OF LLOYDS BANKING GROUP Richard is Director of Annuities and Protection Propositions and Bancassurance for the Insurance Division of Lloyds Banking Group. He is responsible for developing and running propositions that meet customers’ needs and provide good value for customers.

NEIL LEITCH CHIEF EXECUTIVE, PRE-SCHOOL LEARNING ALLIANCE The PSLA supports more than 800,000 children and their families in England through its membership of day nurseries, sessional pre-schools and parent and toddler groups. Neil is a strong advocate for early intervention, believing every child deserves an equal opportunity to progress in life. Before taking up his post of Chief Executive in October 2010, Neil worked alongside the Alliance for more than 10 years, during which time he was instrumental in setting up the Alliance’s Neighbourhood Nursery structure. Neil has overseen the Alliance’s development as the largest voluntary sector provider of affordable childcare and education in England, with 113 registered childcare and early years settings, which includes sessional groups and full daycare nurseries in disadvantaged areas.

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LIFE FEELS BETTER WHEN YOU HAVE A PLAN

25007 10/14 Scottish Widows plc. Registered in Scotland No. 199549. Registered Office in the United Kingdom at 69 Morrison Street, Edinburgh EH3 8YF. Telephone: 0131 655 6000. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 191517.