Canadian parents are still financially supporting their children well into adulthood, sometimes even into their 30s, a new poll sponsored by the Royal Bank of Canada has found.
The bank commissioned polling firm Leger to survey 1,004 Canadian parents last October and November and asked them about the impact that their adult children were having on their own retirement plans. Because the poll was conducted online it can’t be considered to be truly randomized, but for comparison purposes only, a random sample of the same size would yield a margin of error of plus or minus 2.2 per cent, 19 times out of 20.
The survey found that, on average, 96 per cent of parents who have adult children were still financially supporting them past the age of 18. On average, respondents said they were spending an average of $5,623 a year supporting their adult children, by helping them to pay for things like their education and living expenses such as rent. More than half of them said their financial involvement goes all the way down to paying for things like monthly cellphone bills.
Parents are “very conscious about the challenges their kids are facing and are looking to support them as they enter the workforce,” Rick Lowes, RBC’s vice-president of retirement strategy, said in an interview. “But this living gifting will potentially be impacting their retirement savings and plans.”
While the vast majority — 88 per cent nationally — are happy to help and happy to be in a position to be able to, Lowes says that help is clearly having an impact on their own financial lives.
A third of parents responded that helping their adult kids is delaying their own retirement plans, but the ratio jumps to 43 per cent among British Columbians, while it drops to 21 per cent among Quebecers.
“For certain people this is going to be an easier burden than other people,” is how Lowes described it.
And the parental giving doesn’t stop in the typical post-secondary years either. Almost half — 48 per cent — of respondents said they were still giving money to their kids aged between 30 and 35. As much as $3,729, on average, across the country. But as with most things, the figure is higher in some places than others.
The level of support was highest in Canada’s two most expensive housing markets of British Columbia and Ontario.
“It’s probably not unreasonable to conclude that rapid increase in housing prices puts a bit more pressure on children today,” Lowes said.