More than 50% of Canadian parents financially support their adult children, says RBC report

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Here's how much parents are givingLast updated 35 minutes ago About 18 per cent of parents gave their adult children (aged 18 to 40) between $10,000 and $19,999 over the past year. Photo by Getty Images/iStockphotoMore than half of Canadian parents provided financial support to their adult children over the past year, giving an average of $6,151, according to a Royal Bank of Canada (RBC) report this week.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountAbout 18 per cent of parents gave their adult children (aged 18 to 40) between $10,000 and $19,999 over the past year.But it isn’t just the younger kids getting help with their bills — 37 per cent of parents with children aged 35 to 40 said they provided financial assistance to their older children.And while nearly a third (32 per cent) of Canadian parents said their adult children aged 18 to 40 are not yet financially independent, this included about one in five (19 per cent) parents of adult children aged 35 to 40.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“We used to think of it as a linear line to financial independence; it isn’t quite so linear anymore,” said Lucianna Adragna, vice-president, client segments, Everyday Banking, at RBC, adding that Canadians are becoming financially independent later in life.Adragna said part of that dynamic is parents who want to give their children opportunities they didn’t have, though others in the report said their kids lack money management skills. Another key driver comes down to the rising cost of living in Canada, she said.Over the past six years, the consumer price index has climbed nearly 23 per cent, with shelter costs and food prices surging around 30 per cent, according to Statistics Canada. And Adragna said RBC’s projections indicate the cost of living in Canada will continue to increase over the next two to five years, especially given higher U.S. tariffs.“The economy has been in this ‘limbo position’ post COVID, and people are (settling into financial independence) later … so we don’t see this easing up into the future,” Adragna said.Cindy Marques, a Toronto-based certified financial planner and director at Open Access Ltd., said the COVID-19 pandemic “kicked off” a trend of parents supporting their adult children later in life.“That was a pretty financially devastating time for most people, and so I saw a lot of situations where they moved back home because their income was disrupted,” Marques said, adding that rising rents and runaway house prices intercepted plans for financial independence.In the past two years, she has seen more of her clients, who are mainly millennials in their thirties, face employment challenges. She is also seeing a growing number move back to their parents’ homes.“They’re having a hard time being able to save up to actually buy a house because rent is so high, or they want to get married or start a family, or they’re going through job transitions, and so the parents open the house back up,” Marques said.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Groceries are the main item that parents tend to help their adult children with, according to the RBC report, at about 56 per cent overall, more than rent (24 per cent), utilities (21 per cent) and credit card repayment (12 per cent).Adragna said that is likely because groceries are an easy, lower-cost item for the parents, who have their own financial issues, including retirement savings, to worry about as well. “Being able to help your children is also a function of your ability and your financial status,” she said.Marques said she has seen two groups of parents in these situations: those who can afford to support their adult children and those who are doing so to the detriment of their retirement savings. But it is vital for parents to ensure their own finances are being taken care of as well, she said.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.