Boomerang bills: should you charge your adult kids?

An adult child living at home can increase costs. Three experts discuss how to broach the subject and how much rent, if any, is fair.

Whether to charge ‘boomerang’ kids rent or not is a thorny issue. We want to support our grown-up children financially – after all, it’s expensive out there. But having an extra adult at home can cost thousands a year. And what if you have more than one grown-up kid living at home, or if they bring a partner or children of their own? The costs can spiral.

Janey Downshire, family counsellor and author

Young adults should learn to live within their means

“I absolutely believe that adult children should pay rent to their parents. Life, electricity, food, a front door – all these things cost money.

This is especially important for young adults who have recently joined the world of work. 

Living within their means and keeping a budget will help form healthy financial habits that will stand them in good stead when it’s time to move on.

Even if parents end up giving the money back at a later stage, perhaps to help with a deposit, it’s about young adults learning self discipline and taking responsibility.

Expectations on both sides should be discussed. If you choose not to take rent for whatever reason, but would like your family member to save so they can eventually move out, then this should be made clear.

I would expect older adults, who may have lived away from home for several years, to raise the topic of contributing to rent and bills voluntarily, but parents should not feel afraid to ask. Some adults, whatever their age, can revert when back in the family home!

If they can’t pay rent, perhaps they have heavy debts or are unemployed, there are other ways to contribute to a household. Helping with chores like doing the weekly food shop, cooking meals or cleaning is always appreciated and can help stop resentment from creeping in.

Although adult children should pay for their share of food and bills, I don’t think parents should seek to make a profit from rent. 

Most parents want to see their grown-up kids save enough to move on and live independently, that’s what it’s all about really.”

Rachel Rickard Straus, Editor of Moneywise.co.uk

Consider cutting grown-up children some slack so they can save

“The key is to find a level of rent that both parties are happy with. After all, brooding resentment on either side will make living together a lot harder. 

This level will vary considerably from family to family – there’s definitely no right or wrong answer. The important thing is to talk about it. 

For some families, a situation where parents are going out to work every day to pay the bills while the grown-up children don’t pay a penny would seem completely unreasonable. 

However for others, cutting the grown-up children a bit of slack for a period of time so that they can save every last penny towards a deposit seems a reasonable investment. 

Parents sometimes choose to chip in towards a deposit to help their child on to the property ladder but, in some cases, allowing them to stay at home rent-free so they can save amounts to the same thing. 

One thing to consider is if someone moves back home to live with their single parent, the parent will lose their single person council tax discount. The young adult may want to consider at least paying the difference so that the parent is not left out of pocket. 

Moving in as a young adult often requires a real overhaul of deep-set habits – habits that have been in place since childhood when parents would provide everything. 

For those who do move back in, it makes sense to think about it as a new phase, with new rules and ways of doing things – both financial and practical – to avoid slipping into old ways that no longer have a place.”

Alistair McQueen, Head of Savings & Retirement at Aviva

Agree a contract and invest on their behalf

 “Today’s young adults face significant pressures; wages are stagnating, student debt is higher than ever, and house prices are beyond the reach of many. The average price of a house for a first-time-buyer in London is now more than £400,000 1

Our hearts may rule our heads when seeking to support adult children, often by accommodating them in the family home. But careful consideration and practical planning is needed.

It can help to agree a contract. Write down how the relationship will work so both parties know where they stand. Will there be a charge for staying in the house? Is food included? What are the ground rules for using the house, perhaps to host friends?

Clarifying these basics will help minimise potential misunderstandings in the future. To get started, download our contract template.

If you’re able to help your child get on the property ladder, take time to invest wisely. Perhaps you could invest in a property together? This would be a significant undertaking and would need a clear and legal understanding on both parts. 

Alternatively, you could help them invest in a Lifetime ISA – these products are designed to help people under the age of 40 save for a property and carry a special bonus from the government. Or you could invest rent money in your own ISA or a modern investment platform like Wealthify Once the investment matures you can use the balance to help them with a deposit.

The desire for younger people to prioritise saving is understandable, but if they’re working they shouldn’t turn their back on their workplace pension. If they contribute, their employer will put money in too. A little saving today can make a huge difference by the time they retire.”

*The value of the investment can fall as well as rise and is not guaranteed. This means you could be less than you have invested.

Download our Living Together contract template (PDF).

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