Parents of all ages and all levels of income across Australia are worried about the financial future of their children and the ramifications on them if their children and grandchildren fail to attain financial independence, according to Galaxy Research and Stockspot.
The joint research paper, for which 1,005 parents across Australia with children aged 17 years or younger were surveyed, found nine-in-10 parents (94 per cent) were worried about housing affordability and how it would affect their children’s financial future.
Titled “The Future Affordability: Finding Freedom from the Bank of Mum and Dad”, the research also found young parents aged 18 to 34 were considerably more worried than older parents, while mums (63 per cent) were more likely to be “very concerned” than dads (51 per cent).
Stagnating wage growth of barely two per cent a year, the increasing cost of education and increasing household debt were additional barriers to financial independence for children. One-in-five Australians had household debt three times their disposable income.
The study found 81 per cent of parents were unwilling or would be placed under financial pressure to support their children financially into their adult life, while 62 per cent believed young people lacked a savings culture, which impeded their ability to gain financial independence.
Stockspot chief executive and founder, Chris Brycki said while majority of parents (68 per cent) would likely put money into a bank account to build savings for their children, only 13 per cent would put money into a share investment portfolio.
“Education is vitally important. Too many people think they ‘don’t get it’ and don’t teach their children about the value of compound returns,” he said.
“Or they think it’s too risky because they had a bad experience stock picking.”
A third of respondents said they avoided a share investment portfolio due to lack of knowledge about investing while 24 per cent believed it was too risky.
