Report warns of 'major change to family finances'

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Young adults in the UK are depending on their parents for financial support - and putting the older generation's finances under strain.

A new report from The Children's Mutual and the Social Issues Research Centre SIRC found that four in ten 18 to 25-year-olds have at least some of their essential costs covered by their parents.

The "bank of mum and dad" is seen as preferable to the youngsters than taking out loans and credit cards to fund their lifestyles.

According to the report, two in three people in the age group feel that they are "completely financially independent" - but still take money from their family.

David White, chief executive of The Children's Mutual, said: "There has been a major change in the dynamic of family finances and it needs to be dealt with now as the problem could be growing for anyone who has, or is planning to have, children.

"Many parents of today's young adults are choosing to make their children's finances their problem and are increasingly faced with difficult choices - perhaps to take on more debt or to reduce funds that are available for them."

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2009-02-24 12:53:46 © Moneyextra.com