One in Four Brits adopt irresponsible spending habits by copying parental role models
Parents who possess bad financial habits are likely to pass them onto their offspring, potentially leaving them worse off, according to a report from TSB.
Overall, 17% of Brits believe their parents are extravagant, irresponsible or impulsive spenders - yet a quarter (25%) admits to following the same financial behaviours.
Parents are especially likely to pass on borrowing habits, with three-fifths (60%) of those using credit cards regularly acknowledging that their parents were also fans of the plastic, while more than two thirds (67%) of those who take out loans claim their parents also do so.
Despite often being associated with a rebellious nature when it comes to parental relationships, children are seemingly all too willing to adopt their parents approach to money management. Almost half (49%) of Brits who confess to spending all their money before the next pay day say their parents do too. Going even further, a third (30%) of children of parents who spend more than they earn admit to doing the same.
What's more, many Brits are now surpassing their parents' more frivolous spending habits with almost half (47%) regularly using credit cards, compared to just 28% of their parents. Possibly owing to the 'you only live once' (YOLO) mantra as well as a historically low interest base rate, fewer Brits are investing their money (13% vs 16%) compared to their parents, and adult offspring are more likely to withdraw money from their savings (21% vs 17%) than their parents.
Despite acknowledging their parents financial flaws, more than a quarter (27%) of adult children admit to turning to their parents as the first port of call for financial advice. Parents have the most influence on which bank their children trust their money with, as a third (31%) had their first bank account opened for them by a parent, while almost a quarter (23%) chose to open an account with the same bank their parents use. One in 10 also sought their parents' recommendation.
Parents influence on money management continues long into adulthood as a third (34%) of Brits still use their first bank account, while more than one in five (22%) continued to use it for 10 years or longer.
However, this complacency when it comes to money management could mean that many Brits are inheriting unnecessary bad financial behaviours that could leave them worse off in the long run. By simply accepting the status quo, many Brits could be missing out on better deals or opportunities to make their money work harder for them, while regularly relying on credit may encourage overspending or incur further debt to be paid back.
Craig Bundell, Head of Bank Accounts, TSB, said: "Our research suggests that parents have a huge influence on the money management skills of their offspring, particularly when it comes to reliance on credit. Not only are Brits mirroring the less desirable financial habits of their parents, but in many cases they are surpassing them. More adult children have fallen into the routine of spending more than they earn, which could leave them with unnecessary debts and nothing to fall back on during hard times.
"While parents can often be a good source of financial knowledge, a little research can go a long way so we urge Brits to do their homework, regularly assess their finances and make sure they are aware of the accounts and services that best suit their needs. Of course, there may be times when we all need a little helping hand, but understanding the options available can lead to better borrowing."
Notes to editors
Online and Mobile Polling by OnePoll of 2,000 UK adults from 24 to 27 June 2016, conducted on behalf of TSB.
TSB was built to bring more competition to British banking - to be a real challenger to the big banks and to deliver the kind of banking the people of Britain want. TSB only serves local customers and local businesses, to help fuel local economies, because communities thriving across Britain is a good thing for all of us.
We have a simple, straightforward and transparent banking model and make clear on our website how we operate and make money. We offer the products and services people tell us they want, with none of the funny stuff people normally associate with traditional banks.
Our 4.7 million customers, award winning mobile and digital banking, nationwide network of branches and 8,600 Partners mean we are big enough to make a difference, but small enough to be an agile challenger to the entire market.
Classic Plus Account
Account Interest: 5% AER/4.89% gross variable interest (paid monthly) on balances up to £2000. Pay in a minimum of £500 a month, register for Internet Banking, paperless statements and paperless correspondence.
Contactless cashback: 5% cashback (paid monthly) on your first £100 of contactless payments (inc. Apple Pay). Plus contactless debit card is subject to eligibility. Offer ends 31 Dec 2016 for existing customers, 30 Sept 2017 for accounts opened on/after 1 June 2016.
For further information about TSB Bank plc, please visit our website