‘Costs soar at hotel of mum and dad’

Bethany Osborne with Oliver and Evelyn
Image copyrightBETHANY OSBORNE
Bethany Osborne moved back in to her parents’ house with her children Oliver, 1, and Evelyn, 5, last Christmas

Bethany Osborne left home at 19, but now, at 22, she’s back in her parents’ home in Romford, using their washing machine, eating food from the fridge and watching TV on her dad’s Netflix account.

“I do my own washing if I get to the machine first. But my mum generally does it,” she admits.

The pile of dirty clothes is not just hers. She has a five-year-old and a one-year-old too.

“Buying the kids’ clothes and food – I do it sometimes,” she adds, but most of the time her mum’s got there first.

About a quarter of young adults in the UK aged 20-34 live at home, a figure which, according to the Office for National Statistics

, has been growing steadily for 15 years.

Many returning adult children enjoy home comforts such as cooked meals, a full fridge and cleaning, as well as their bills being covered by the “hotel of mum and dad”, according to a survey by price comparison website MoneySuperMarket.

The average cost to the hoteliers – mum and dad – has gone up sharply, meaning parents are sacrificing luxuries and holidays, the survey found.

MoneySuperMarket found that last year, adult offspring were returning for an average of 9.7 months, while parents were incurring costs of around £895.

This year, the “kidults” were staying longer – just over 10 months – and costing their parents £1,640 as the householders shouldered the water, heating and electricity bills, as well as paying for takeaway meals, toiletries and food.

The price comparison site surveyed 500 adults who had moved back into their parents’ home and 500 parents who had adult children back living with them.

MoneySuperMarket’s spokeswoman, Emma Craig, says parents are under huge emotional pressure to help children struggling with their finances.

“I think what we’re seeing is more young people with more debt, so when they’re going back to their parents’, they’re coming with higher student loans, probably credit card debt, maybe payday loans.”

“So the reason parents are paying more is they’re trying to look after their children more. If your child comes home and you see them struggling financially, you feel more awkward asking them for rent or to contribute. It tugs on your heartstrings more.”

Washing machineImage copyrightGETTY IMAGES
Parents often end up doing the laundry of grown up children

The survey found that 18% of adult children said they were moving back home because of debt, compared with 8% last year.

Moreover, 12% said it was because they had lost their job, compared with 7% last year. This year, 27% said it was because they couldn’t afford their rent, compared with 25% last year.

On top of the day-to-day spending, parents reported forking out £1,886 on redecorating, buying new furniture and upgrading their wi-fi to accommodate returning offspring.

In Bethany’s case, she doesn’t have any extra debt on top of her student loans, but her relationship with her partner broke down and as a trainee nurse she couldn’t afford to rent an apartment on her own.

With seven of them in her parents’ house (including a 20-year-old sister home from university and an 18-year-old brother still at college), there is friction over the one bathroom and who should unload the dishwasher.

But her parents seem willing, determined even, to shoulder the costs and help out, says Bethany.

“My mum feels obliged to, because it’s like when we were little. She feels the three of us – me, my brother and sister – are like her little kids still,” she says.

Overhead shot of office workers at a table
Image copyrightGETTY IMAGES

Wage growth in the UK picked up to 3.9% in the year to June, the highest rate for 11 years, according to the Office for National Statistics (ONS).

Overall, a record high of 32.81 million people were in employment – 425,000 more than a year earlier, largely because of more people working full-time.

Mr Hughes added: “Employment continues to increase, with three-quarters of this year’s growth being due to more women working. However, the number of vacancies has been falling for six months, with fewer now than there were this time last year.”

Chancellor Sajid Javid said: “Every person deserves the chance to succeed and provide for their families through a steady income.

“Today’s figures are another sign that despite the challenges across the global economy, the fundamentals of the British economy are strong as we prepare to leave the EU.”

Rate moves

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the figures should silence any calls for a cut in interest rates.

“The labour market tends to lag developments in the wider economy,” he said. “Firms, however, have lived with high levels of economic uncertainty for the best part of a year, and still want to fill new positions.”

He added that the Bank of England has in the past used the annualised rate of growth in wages over three-month periods to back interest rate increases.

But he said: “In the event that Brexit is delayed further – still our base case – or an agreement is reached in October and the economy starts to rebuild a little momentum, the MPC (Monetary Policy Committee) will need to move in short order to raise the bank rate again.”

Employment rate graph

Tej Parikh, chief economist at the Institute of Directors, said that while the jobs market remained “a source of strength for the UK economy”, it may be reaching its peak.

“With investment in machinery and technology often deemed too risky right now, businesses have sought to bring on board more staff to help lift output,” he said.

“But as more workers have been snapped up, firms have found it harder to fill their openings. While competition has pushed up salaries, thin margins and low productivity may set a ceiling for pay growth. Although vacancies remain high by historic standards, the number has been dropping since the start of the year.”

Ian Stewart, chief economist at Deloitte, said: “The days of sharply falling unemployment are behind us, but a tight labour market points to further gains in wages and spending power. Despite a second quarter decline in growth, the UK economy still has momentum.”

Payments giants abandon Facebook’s Libra cryptocurrency

Facebook had said it hoped to launch Libra in 2020
Facebook had said it hoped to launch Libra in 2020

Mastercard, Visa, eBay and payments firm Stripe have pulled out of Facebook’s embattled cryptocurrency project, Libra.

In a statement released on Friday, eBay said it “respected” the Libra project.

“However, eBay has made the decision to not move forward as a founding member. At this time, we are focused on rolling out eBay’s managed payments experience for our customers.”

A spokesperson for Stripe said the firm supported the aim of making global payments easier.

“Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage.”

A spokesperson for Visa said: “We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations.”

The Libra Association, set up by Facebook to manage the project, said of the departing companies: “We appreciate their support for the goals and mission of the Libra project.

“Although the makeup of the Association members may grow and change over time, the design principle of Libra’s governance and technology, along with the open nature of this project ensures the Libra payment network will remain resilient.

“We look forward to the inaugural Libra Association Council meeting in just 3 days and announcing the initial members of the Libra Association.”

Facebook’s executive in charge of its Libra effort wrote on Twitter that losing the firms was “liberating”.

“I would caution against reading the fate of Libra into this update,” wrote David Marcus, who before joining Facebook was PayPal’s president.

“Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.”

Last week, PayPal said it would no longer be part of the Libra Association, but did not rule out working on the project in future – prompting a strong reaction from the Association.

“Commitment to that mission is more important to us than anything else,” it said in a statement. “We’re better off knowing about this lack of commitment now.”

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