More young adults financially dependent on parents: study

A new study finds parents and grandparents are acting as a financial safety net for their adult children.

A new study conducted by the Bank of Montreal (BMO) has found that more young adults are relying on the bank of Mom and Dad.

Walter and Jean Doue of Sydney, N.S., are approaching retirement age, but are not empty-nesters.

“I can relate, yes,” said Walter. ”I have an adult child living with us.”

Their daughter, Sarah Doue, is in her 30s and works multiple jobs – from the tourism sector, to substitute teaching.

He says she has looked around for a place of her own, but apartment rates in the area – and other costs of living – have been too expensive.

“We could do the math right now and look at it and say for a single person, you’re looking at what, close to $1,500 for a (one) bathroom, one-bedroom apartment. But if you’re only making minimum wage... it’s still not enough to be sustainable,” said Walter.

The BMO study found that nearly half, or 45 per cent, of parents and grandparents surveyed plan to support their children or grandchildren financially in the next year.

It also found that more than one in five, or 22 per cent, of Gen Zs who were polled – along with 15 per cent of millennials – rely on some parental support for general expenses.

Along with the cost of living, there may be some cultural expectations at play too.

The study found that 88 per cent of respondents believe parents must continue to support their children financially into adulthood and 29 per cent believe this support should last for as long as the parents are alive.

Walter says supporting their adult child will not get in the way of being able to retire. He also points to the fact they have three breadwinners living under one roof as a sign of how tough it is to make ends meet these days.

“I work two jobs,” Walter said. ”I’m a teacher, and I teach in the evenings. Jean is a nurse. Sarah does tourism and with all that, it’s enough to try to stay above board with the mortgage payment and everything else that goes with that.”

The study also makes note of something it calls the ‘sandwich generation’ – pointing out that nearly two in five Canadians, or 37 per cent, are responsible for the financial well-being of aging parents or in-laws, with some also supporting children at home.