Rise in multi-generational households: Could it benefit all generations?

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A third of UK households are now multi-generational, according to Aviva. While it does present challenges, it could benefit all generations and improve financial security.

It’s estimated that across the UK, nine million homes are occupied by multiple generations. It’s expected that this type of set up will increase further. This is partly down to the financial challenges different generations are facing, but it can also provide other benefits too. For some families, a multi-generational household can suit their needs.

Grown-up children

When you think of a multi-generational household, it’s probably adult children living at home with parents that come to mind.

Young adults are increasingly moving back home when they finish university, or to save a deposit to buy their own home. Salary increases have not kept up with the rising cost of living. As a result, many of those starting careers are struggling to make ends meet.

The sizeable deposits first-time buyers need often mean saving up while renting is impossible. The average age of a first-time buyer is now 33 according to the annual English Housing Survey, up from 31 a decade ago. As a result, some adult children could be living with a parent for many years after moving back in.

The financial benefit to this generation is obvious. Without rent to pay, they’re able to divert more of their income to savings. Even when contributing to household expenses, this is likely to be far less than living independently. Living with parents can help them get on the property ladder sooner.

If you’re a parent of a grown-up child living at home, you may also be considering lending a hand by providing a lump sum. According to Legal & General, 56% of those buying a home under the age of 35 did so with a financial gift. The Bank of Mum and Dad has become important in the property market. If you’re considering gifting or lending money, you should understand the long-term implications first. Please contact us to discuss this.


As a parent, you may enjoy having children back home, although it can come with challenges. However, it can have a positive impact on your financial situation too.

If adult children are now contributing to household bills, you may find you have more disposable income than you’d expected. It’s a benefit that can make your mid-years more comfortable and with a bit of planning can improve financial security later in life too.

When your income changes, assessing your priorities is important. You may decide you want to make use of the extra income to book a holiday, spend more on hobbies or simply to give you more freedom. However, considering the long-term is useful too. Increasing pension contributions, investing, or adding to a savings account, could improve your lifestyle for years to come.

Please get in touch to discuss your income and how it could help you meet aspirations.

Older relatives

The Aviva research also highlighted multi-generational households occurring when older relatives move in with family. This accounts for 14% of multi-generational homes, the equivalent of 1.28 million families. While small compared to the number of young adults living with parents, it’s a rise of 5% in the last four years, indicating a trend.

From a financial perspective, older relatives moving in with children can save on the cost of care. Even when full-time care isn’t needed, having a carer visit a property can add up to tens of thousands of pounds a year. Living with a relative can remove some of this burden and preserve wealth for future generations.

Of course, there are non-financial benefits to this arrangement too. Older relatives, particularly those who struggle with mobility, can feel isolated in their own home. Living with family can provide the support they need, as well as the social side of living with their loved ones.

While older relatives may be living with you, you should have a backup plan in place too. Plans can change and there may be a point where you can’t deliver the care needed, so having a care plan can provide peace of mind.

Does your home need updating?

With more homes becoming multi-generational, you may be thinking about updating your home to provide the space needed.

According to research, as many as one in eight UK homes could soon include additional accommodation in the form of a granny flat or annexe. Some 5% of households have already converted garages, cellars, and separate outbuildings to create extra living space. A further 7% plan to develop these spaces. It can make multi-generational living more comfortable and give individuals their privacy.

If this is something you’re considering, you may be wondering how taking the cost out of your savings will affect your plans or whether a loan makes sense, contact us to discuss your financial plans.


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