A study conducted by the Central Statistics Office (CSO) has revealed a significant shift in the living arrangements of young adults in Ireland.
The data shows that less than one in 20 25-year-olds own a home, while almost seven in 10 still live in their family home. With soaring rents, unaffordable house prices, and a severe housing shortage, many young adults - despite full-time employment - are finding it increasingly difficult to move out.
This trend presents both financial and emotional challenges for families. Parents may find themselves covering extra household costs, while young adults struggle with balancing financial independence and security. But should they be expected to contribute if they are earning an income?
Nick Charalambous, Managing Director of Alpha Wealth and an expert financial advisor with over 25 years of experience, has shared his thoughts on the topic.
Should Parents Charge Rent?
“For some families, asking adult children to contribute is necessary to help cover rising costs like food, energy, and general household expenses. For others, it’s more about teaching financial responsibility - helping young adults learn how to budget, pay bills, and understand the real cost of living.”
“The amount they contribute varies widely depending on each family’s situation. Some parents request nothing, while others follow the traditional guideline of asking for a third of their child’s take-home pay. Another approach is to divide household expenses by the number of occupants - for example, if there are three people in the house, each contributes a third of the total household costs.”
“At Alpha Wealth, I often advise clients to follow a simple budgeting principle: save a third, spend a third, and use a third for necessary bills. This same framework can be applied to young adults living at home. Suppose parents want to encourage financial independence while helping their children save for the future. In that case, they might suggest setting aside a portion of their income in a long-term savings plan—such as a dedicated account with an insurance provider—to build towards a house deposit in five to ten years.”
What Happens to the Money?
“Another key question is, what do parents choose to do with money? Will it go towards everyday expenses, be put aside for a family holiday, or even be saved and gifted back to the child in the future? Parents should also consider tax and financial planning. Any financial support or contributions now could have tax implications down the line, particularly when it comes to inheritance planning and passing on wealth to children.”
“Ultimately, there is no one-size-fits-all approach. Each family’s financial situation is different, and the most important thing is to have open discussions about money. Transparency helps ensure a solution that works for both parents and adult children, whether it is contributing to household expenses or prioritising savings for the future.”
Book a financial review with Alpha Wealth at www.alphawealth.ie for trusted financial advice on tax savings, pensions, investments, and more.
