Young people have been hit hard economically by the coronavirus pandemic, but it’s their parents and grandparents who are paying the price.
In an interview with Yahoo Finance UK, Emma Graham, business development director at Hodge, said: “The biggest knock-on impact from this pandemic is that both parents and grandparents at the other end of the financial life cycle are probably more impacted than the younger generation in many respects.
“They are the individuals that the young people are turning to ask for financial assistance and help, to ask for support to plug gaps in income losses, to help them to build up their savings.”
According to Office for National Statistics (ONS) data, 537,700 people aged 16-24 claimed unemployment related benefits in July of this year which is a 122% increase from March 2020.
In May, the think tank Resolution Foundation also conducted a coronavirus survey which found that one third of employed 18-24-year-olds, excluding students, had lost their jobs or been furloughed, in comparison to to one in six prime-age adults.
Earlier this month, a survey conducted by Hodge Bank which spoke to over 3000 people found that 58% of over 75s said they were happy to help family out financially, and the older generation have begun bearing some of the brunt of the COVID-19 pandemic for their younger family members.
“It’s having a really negative impact further on through the financial life cycle. The over 55s and over 65s who have got a lot of wealth locked within their houses as a form of equity will plug those gaps for these individuals over the coming years. It is concerning,” said Graham.
Young workers were among the most negatively economically impacted by the coronavirus crisis, as well as workers from Black, Asian, Minority Ethnic backgrounds, women, disabled workers, and low paid workers.
People under 35 years-old make up almost 50% of workers in sectors which have been forced to shut down due to the pandemic, according to ONS figures.
A quarter of home buyers are more reliant on the Bank of Mum and Dad since the pandemic began, Legal and General (L&G) found, and 23% of UK property transactions will be backed by parents compared to 19% in 2019.
Moreover, 15% of Bank of Mum and Dad lenders plan on giving more financial support than before the coronavirus outbreak, indicating an increased reliance on older family members from the younger generation.