Thirtysomethings who depend on the Bank of Mum and Dad

Parents are putting their own financial security on the line to support their grown-up children, researchers say.

Increases in university tuition fees and living costs, coupled with soaring house prices, mean many young adults are increasingly reliant on the "Bank of Mum and Dad".

An amazing 95 per cent of parents reckon they will be supporting their offspring well into adulthood, according to a report by saving specialists the Children's Mutual.

Many parents are neglecting their pensions, raiding their savings and even remortgaging to give children a helping hand.

They are also giving up holidays and other major purchases which they had planned as an indulgence once their children left home.

The bleak picture of a generation of young adults still dependent on their parents emerged in a study by the Social Issues Research Centre.

Of 1,000 parents questioned for the Coming of Wage report, just five per cent said they expected to stop funding their children when they left home.

David White, chief executive of Children's Mutual, said the fact the average age of a first-time house buyer was now 34 signalled that parents were often supporting their children financially well into adulthood.

He added: "Over 30 years there has been a dramatic change in the shock you get when you have kids in this 18-30 age bracket.

"The shock is that children need pretty significant financial help. What's interesting is that they expect to get it, and even more interesting is parents are giving it to them."

Nine out of ten parents said they expected to help children through university and half said they would help them get on the property ladder.

Some were even more generous – four-tenths said they expected to fund business start-ups for their offspring and 35 per cent said they would pay for their children to go travelling.

The report also found there had been a huge increase in the cost of becoming an adult.

When those currently in their 40s and 50s were younger, far fewer people went to university – and those who did often received grants. But the introduction of tuition fees means the average graduate now leaves university with £12,000 of debt.

Meanwhile, house deposits have risen by more than 450 per cent in ten years.

Some 40 per cent of teenagers said they despaired of buying a house without parental help.

Researchers found that parents were increasingly worried about how their children would cope financially.

Some 64 per cent fretted about the cost of higher education and a similar number were concerned their children wouldn't be able to buy a house.

Mr White said that parents were often caught unawares by the financial sacrifices they had to make for their children.

"They are in a vicious circle where they are raiding their savings, holding back on pretty significant pension contributions or remortgaging their house at the very time when they hoped they would be paying the mortgage off," he added.

"It's not really a choice between 'do we do this for the kids or do we go on a cruise', because parents want to help their children."

He said that the parents with the best chance of coping financially were those whose children were under five.

"By engaging now and saving a little often, they could help to avoid the financial conundrums being faced by the parents of today's young adults," he added.

Rich kids told to earn their inheritance

Coming from a rich family doesn't mean you can bank on a hefty inheritance, as Paris Hilton has recently discovered.

The hotel chain heiress was disinherited by her 80-year-old grandfather Barron Hilton with suggestions he disapproved of her imprisonment for driving offences.

A growing number of rich families are following his lead, by threatening to withhold legacies unless youngsters knuckle down and get qualifications and a proper job.

More than half of those interviewed for a survey said they wanted their children to make their own way in the world. "Parents are getting stricter," said Jeremy Arnold of Barclays Wealth, which carried out the study.

"They want their offspring to share in their prosperity, but they need to educate and prepare their children for the responsibility of wealth.

"It is important to ensure children have the desire to achieve their own success."

The most common way for rich families to prevent their children from becoming idle is to raise the age at which they can inherit from 21 to 25, according to the survey.

Financial "boot camps" – where heirs are taken to a hotel and taught about investments and tax planning – are also increasingly popular.