Between 2006 and 2024, the proportion of 25- to 34-year-olds
living with their parents increased from 13% to 18%, hitting a
peak of 21% during the COVID-19 pandemic before falling back
slightly. The 5 percentage point rise since 2006
represents around 450,000 more young
adults living with parents than if rates had remained at
their 2006 level. Living with parents at these ages is
particularly common among men, those on lower incomes and
those from Bangladeshi backgrounds.
New research 'Hotel of Mum and Dad?', funded by the
Economic and Social Research Council, and published today by IFS,
examines who lives with parents, the drivers of this rise in
living with parents, and the implications for young adults'
savings. The research finds that:
The rise in living with parents has been concentrated
among those in their late 20s and varies
substantially by ethnicity.
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The share of 25- to 29-year-olds living at a parental
home has increased from 20% to 28% between 2006–07 and
2023–24. In contrast, the share of those aged 30–34
living at a parental home has changed very little over this
period.
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Comparing ethnic groups, the largest percentage-point
increase in the share of 25- to 34-year-olds living with
parents was among those from Bangladeshi backgrounds,
for whom the rate rose from 28% to 41% between 2006–07 and
2023–24.
25- to 34-year-olds have changed as a group since 2006 – for
example, becoming more ethnically diverse, and less likely to be
married or to have children. However, these changes in
composition have not played a large role in pushing up the
fraction of people who live with their parents, explaining at
most one-tenth of the rise.
Other factors – such as declining housing affordability – have
played a more substantial role in explaining these trends.
-
Increases in the rate of 25- to 34-year-olds living
with their parents have tended to be higher in areas that have
seen high house price growth since 2006. The largest
increases over this period occurred in the South West, where
the rate rose by 58%, and the East of England, where it rose by
56%.
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Parents in their 50s and 60s and living in London,
where house prices are highest, are particularly likely to have
adult children living with them, consistent with those
who grew up in the capital being more likely to live with their
parents.
Those living with parents are a diverse group. Some are enabled
by living with parents to save on rent and accumulate savings
more quickly, reduce debts or increase spending. But for others,
living with parents looks like a response to a negative event and
is associated with falling wealth.
- We estimate that those living with parents would pay
around £560 per month in rent on average if privately renting –
rising to £1,000 per month in London.
- 14% of young adults living with their parents saved more than
£10,000 in net financial wealth over a two-year period – i.e. an
additional £400 each month. This rate is more than a
third higher than the 10% estimated rate for similar
young adults in private rented accommodation.
- However, those living with their parents are also
more likely to see large declines in net
wealth, indicating that the option to live at home is
likely functioning as a safety net for some experiencing adverse
events as well as enabling some young adults to save more.
Bee Boileau, Research Economist at IFS and an author of
the report, said:
‘In the last decade and a half, there has been a substantial
increase in the proportion of young adults living with their
parents. This has occurred alongside – and indeed has been
fuelled by – increases in rents and house prices.
‘For some, living with parents provides an opportunity to build
up savings more quickly than if they were renting – which is an
especially valuable advantage in high-cost places like London.
However, others are likely to be living at a parental home due to
a bad shock of some kind – such as the end of a relationship or a
redundancy – or simply because they cannot afford to live
independently.'
