Grown up children paying rent

[ivykaty44]

You know the story, adult off spring living at home and paying rent, then the parent saves it up for them and gives to them when they leave home

Well wouldn’t it be better financially if they put that money into a pension, like from the start

If they’re living at home just arrange for the off spring to put into a pension.

Nothing wrong with adults all contributing to household and bills etc. Rent can be spent on those things and should be

But if you’re going to save it up, I’d be far better to be putting an extra £200 in a pension scheme for 4/5 years than sitting in a bank earning diddlysquat

Its an idea certainly, but most young people do have a lot of more immediate expenses when they move into their own place.

Who gives a toss about a pension in your 20s

Good idea but most people need it for a deposit or furniture etc.

err no..They will, pay rent which I will spend on bills and food.

Isn’t the general idea for most people to save it up to go towards a house deposit?

The parents will (probably) never get to see the impact of the pension, whereas they might see the impact of the child being able to buy their own home. Also a pension won't help if the relationship breaks down because they are getting on each other's nerves, whereas being able to say 'look I love you but I have had enough of clearing up your mess, you need to move out and find your own place.... Oh, you don't have the money for a deposit, SURPRISE!

Whilst financially a pension might make sense, realistically as people we like to gain gratification from seeing the effect of our investments and it is harder to imagine the impact of our lives beyond our lifespan.

Obviously if you have the money to give to your child as a deposit AND put money in their pension (which hopefully they are doing themselves through work anyway) then go for it.

People on MN are obsessed with pensions. Fair enough if there are employer contributions but in your 20s I think you're better saving towards a house rather than a private pension. What's the point of a comfortable retirement if you put off having children and then doing things with those children because you can't afford a secure home?

The main benefit of putting money into a pension is the tax relief, however putting money into a pension for somebody else will not result in tax relief. So the money put it into the pension is then invested, same as any other money can be, other than it cannot be accessed for a very long time.

So no, not really, helping to contribute towards a house deposit is likely to be more helpful to a young adult.

You can put it in a stock and share ISA to save it and achieve the same return as you would if you put it in the pension. The pension simply reduces your access to the money in exchange for tax perks. It's unlikely to be the best choice for a young person saving for a deposit who needs the money much sooner.

I think the objective is to get them out of your house, not safeguard their entire financial future. That is for them as adults to deal with.

What happens if the parent needs the money for bills and food? The adult child is still living there costing money.

Yes, but I take it this thread is about parents who don't need the rent money.

@PlasticPlantsDontDie

What happens if the parent needs the money for bills and food? The adult child is still living there costing money.

Then the pension or house deposit debate is not relevant.

I find the whole “charge them rent and give it to them” patronising. I think either trust them as adults to save money for themselves and let them live there for free in order to let them save this money (contributing to bills/food if this is a struggle) or get insurance and a contract and charge them rent properly if you want to rent out their room as a source of income. I find it sad that parents don’t trust their adult children to save money without it being taken off them by a parent like they are a child.

err no..They will, pay rent which I will spend on bills and food.
Yes!! I never saw my rent again nor would I have expected to, you shouldbe tellingthem to put it in account for themselves!!!! Sorry but yabvvvvvvvu!!!

We were fortunate to be able to start a pension for our DS when he was born, he's 20 now and it has built up. However I appreciate not many people can do this.

He will also have savings for a deposit on his first home ... but we are lucky, he is an only child, we are older parents, have had a couple of inheritances in our time so have been able to put money on one side ... and due to choosing carefully where we moved to we now live in a cheaper part of the country and could pay our mortgage off.

And yes, if he lives at home when he is working (currently at Uni) he will definitely be paying 'board' ... we will either add it to his pension pot or towards his house deposit.

Who gives a toss about a pension in your 20s

exactly, I have a friend (know since 17) who's father convinced her to take a pension in her early 20s and pay way more than the average and tick a few boxes.

Now 40 years later, goes what she said to me, glad my father encouraged me to take a pension and pay above average and tick the rear at 60 box (remember back then we would have been drawing pensions at 60 anyway) and mow shell be able to retire at 60 on a private pension that started off as a large amount but soon after a few pyrites became a much more unnoticable amount.

Bedpost I agree with you in theory and hopefully we have all raised DC who will save ... but I am sure we all know young adults who, for whatever reason, won't or can't save and blow their money on gadgets, nights out, holidays etc ... if that was my DC (who fortunately is a good saver) I would put 'board money' on one side.

I never saw my rent again nor would I have expected

my dd will not see her rent/contribution to the household again, its been spent - on the household bills

its about rather than give back as savings, putting into a pension

not about whether rent "should" be given back as savings

What happens if the parent needs the money for bills and food? The adult child is still living there costing money.

Its not about that, its about parents who put the money to one side and give it back, surely it would be better to put into a pension - as it'll actually make the adult child far more comfortable in old age as the money would be better invested

What happens to the pension if you die before 60, or whenever you retire, though?

What happens to the pension if you die before 60, or whenever you retire, though?

what happens to any pension if you die before you're 60?

Well, that’s what I’m asking.

Do whatever you want with the money , me personally I’m not saving it for my dc at all . They will inherit my house and anything when I’m gone until then they want something they earn it and that goes with paying your way by paying rent to live at home .

@FoxIvy

perhaps because the majority of of an age where they are looking at their pensions and thinking....f&*k ive got nothing in my pot

nice nam by the way