Why UK Young Adults Are Relying More on Parents? __ An Interview With Keith Pilbeam

More young adults in the UK are relying on financial help from parents and grandparents just to get by. With rising living costs, expensive housing, student loan repayments and lower-paid, insecure jobs, many are finding it impossible to become financially independent. In this interview, Professor Keith Pilbeam explains how these growing pressures are widening the gap between generations — and why relying on family support may not be sustainable for Britain’s future. 

1. What are the main economic pressures driving young adults in the UK to rely more heavily on financial support from parents and grandparents?

 Young people have high marginal rates of taxation as they have graduate loans to repay in addition to the normal income tax and national insurance tax. More recently the emergence of Artificial Intelligence has meant there are less graduate jobs being advertised making it harder and more competitive. For youngsters to get jobs.

House prices have risen so much over long periods of time that the price of the average house/flat compared to disposable income. Of young people makes affording a accommodation much harder, even renting is not cheap so increasingly they are forced to stay at home and live with their parents. Brexit has also made the UK economy less dynamic and a recent report suggests that GDP is 6% smaller than it would otherwise be and we know that a poor economy impacts the young more than established workers.

Compounding this issue is the competitive nature of many industries, where unpaid internships, short-term contracts, or years of underpaid early-career work are treated as normal steps toward progression. Consequently, young people often find themselves in a cycle of instability that undermines their ability to save or plan for the future.

 2. How do stagnant wages and insecure job contracts contribute to long-term financial instability for young people today?

 Stagnant wages are the result of many factors including the lack of growth in the UK economy, this makes it harder for young people to get high paying jobs that will enable them to save money and improve their financial security. The government has decided to continue With the triple lock for pensioners and this is paid for by increasing the taxation burden on the working population, this again makes It harder for youngsters to save or for governments to reduce the burden of student loans.

The younger generation was also heavily impacted by the Covid-19 pandemic and the isolation of that period means they have missed out on developing some of the vital “soft skills” that employers value such as team work, ability to build working relationships and work to common goals.

3. To what extent does intergenerational lending reflect deeper problems in the UK housing market, particularly for first-time renters and buyers?

 Due to their stagnant wages, and increased living costs the young cannot rely on banks to lend them money as it impairs their credit rating, Naturally parents and grand-parents then become a vital source of finance for young people, however, even parents and grand-parents have been impacted by higher taxes and problems getting real wage increases and this leads to a division among the young between those who have relatively well-off parents and those that have Papents that are themselves struggling.

 4. What does the rise in financial dependence on older relatives reveal about generational inequality in Britain?

 Grandparents have benefitted from free university education, large increases in house prices relative to wages, the triple lock and generous company pension schemes as well as the ability to retire at 65. The young find that their income after taxes is insufficient in many parts of The country to get on the housing market and also food inflation impacts them more than the older generation as do travel costs, the annual interest on the UK national debt is now over £100 billion a year, so the government finds it difficult to make funds available that could help young people such as providing housing subsidies and free transport for say under 24s.

 5. How well are local councils, charities, and community organizations equipped to respond to the housing needs of Ukrainian arrivals?

 The arrival of large numbers of Ukrainians displaced by war has placed significant additional pressure on the UK’s local councils, charities and community organizations. The ability of these agencies to meet housing needs is limited by uneven capacity and a chronic shortage of affordable homes.

Local authorities moved quickly to deliver the essentials, such as. Welfare checks, safeguarding, school and GP registrations, and emergency support for hosts and guests under the Homes for Ukraine scheme. Charities and community groups complemented this with culturally specific guidance, English classes, mental-health support and help navigating benefits and tenancy processes. This partnership model was crucial in meeting immediate needs and not long- term housing needs.

As initial hosting arrangements end, a growing number of Ukrainian arrivals are becoming homeless, revealing that many councils lack both the housing supply and specialist staff needed to secure settled accommodation. The UK’s general shortage of social and affordable housing combined with limited resources available to councils have meant it is difficult to find longer terms housing solutions.

Overall, support for Ukrainian longer term housing needs varies significantly across different regions of the UK, without greater central government funding and landlord incentives the housing situation for Ukrainians resident in the UK will l remain fragile.

 6. What long-term risks do you see if family lending becomes a permanent substitute for structural economic reform?

 One of the most profound dangers is the entrenchment of wealth inequality. When family resources become a prerequisite for financial well being such as homeownership, entrepreneurship, or higher education opportunity becomes tied more closely to heritage than to effort. Young adults from affluent families gain a substantial advantage, while those whose parents cannot offer financial support face significantly diminished prospects.

Another problem is that reliance on family lending also distorts the housing market. When parents and grandparents provide financial assistance for deposits or purchases, demand for properties is artificially inflated beyond what wages alone would support. This keeps housing prices artificially high making them even more inaccessible to those without family support. Another long-term risk is the delayed transition to independent adulthood.

When young adults cannot afford to move out, invest in their careers, or start families without parental support then key life stages are postponed. These delays can reduce broader economic dynamism, lower household formation depresses consumer demand, reduced financial independence discourages entrepreneurship, delays family planning worsens further the UK’s already declining birth rate and weakens long-term economic productivity. The strain placed on older generations also cannot be overlooked.

Parents and grandparents providing financial support often draw from their savings, pensions, or retirement resources. This may mean they face greater financial insecurity themselves when they may most need it.

Finally one of the most insidious consequences of relying on family lending is the erosion of political will for structural reform. When private households absorb the consequences of wage stagnation, high housing costs, and an eroded welfare system, governments face less pressure to address these systemic issues directly leading to economic stagnation.