The following is a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 41, watch on YouTube or scroll on to read the conversation.
Takeaways from this episode
- Multi-generational living is the fastest growing household type - families are increasingly sharing homes to manage soaring costs like rent, childcare, and eldercare.
- Experiences and motives vary widely - cultural traditions or financial goals may prompt the decision to live under one roof. Setting financial and relational expectations at the beginning sets everyone up for success.
- Hard to get on the housing ladder - the average age of first-time homebuyers in England is 34 years old. Saving money on living costs in the private rental market helps young adults save for their own homes.
- In-home care can reduce eldercare expenses - the cost of a live-in carer exceeds £40,000 a year according to NHS estimates, meaning households could save money by providing care within the family.
- Providing unpaid care has long-term financial impacts - PensionBee’s Carer’s Pension Gap report found that there’s an estimated £5,000 loss to your pension for every year you’re out of paid work.
PHILIPPA: Hello, welcome back. Today, we’re exploring a comeback - multi-generational households. Why are more and more people choosing to live under one roof with two, three or even four generations of their families?
Well, think about it for a moment and you can see how it could make great financial sense. Renting or buying a home, living expenses, childcare, eldercare - they’re all getting more and more expensive so maybe that’s why multi-generational living is the fastest-growing household type in the UK right now.
But what does it take to make it work well for everyone? And if you think you might like to try it, what are the benefits and the challenges you should be ready for? Costs, space, boundaries, how’s it all going to work? Let’s find out.
I’m Philippa Lamb. Before we begin, have you subscribed to the podcast yet? If not, click right now - you’ll never miss an episode.
We’re talking about the ins and outs of multi-generational living. Here with me, I have Sam Bartley, he’s a comedian and half of the comedy-duo, BAM! Comedy. Best known for their hit comedy song, “Living with my Parents“, so yes, he knows all about this from first-hand experience, right Sam?
SAM: I do, yes, unfortunately.
PHILIPPA: And so does Simmy Kaur. She’s Senior Social Media Manager at PensionBee. She’s not only lived with her in-laws as a newlywed, she loved it so much she would happily do it again, right Simmy?
SIMMY: Yes, I would.
PHILIPPA: But what about the facts and the figures? Molly Broome, you haven’t lived back home, have you?
MOLLY: I haven’t.
PHILIPPA: Since you left university.
MOLLY: Not for some time.
PHILIPPA: But you have dug into this subject because you’ve got a lot of insight here. She’s a Senior Economist at the Resolution Foundation. You co-authored that annual report on intergenerational living in the UK, right?
MOLLY: Yeah, I did.
PHILIPPA: Thanks very much for coming in, everyone. It’s great to have you.
ALL: Hi.
PHILIPPA: Here’s the usual disclaimer just before we start. Please remember, anything discussed on the podcast, it shouldn’t be regarded as financial advice or legal advice. When investing, your capital is at risk.
Rise of the boomerang generation
PHILIPPA: Now, full disclosure, I’m doing this right now. My son’s back home with me, after uni before he goes off to do his MA. I’m going to say I’m mostly loving it because he’s a really good cook and he makes me laugh. I’m not going to pretend we haven’t had our moments. Tell me about yours. What were the best and the worst parts of living in a multi-generational house, Sam?
SAM: Yeah, it was great. Overall, I can’t complain.
PHILIPPA: You were with your in-laws or your parents?
SAM: My in-laws, so Bec’s parents. Obviously, there’s some hiccups. You’ve got to be a bit careful. You’ve got to hold in farts and all that stuff. Obviously, being on my best behaviour for 18 months was tough.
PHILIPPA: How well did you know them before you did it?
SAM: Well, we’ve been together for eight years, so we do know each other really well.
PHILIPPA: Simmy, you were a newlywed, weren’t you?
SIMMY: I was, but that’s quite normal within our culture. But I’d say the best part was to just have time together. I think it was a good way to get to really know each other, especially with my daughter, because she was born there as well. Then the worst would probably be just not getting alone time.
PHILIPPA: That’d be the big one for me, I’ve got to say. Molly, as I say, you haven’t done it. Can you see yourself ever doing it, maybe later in life?
MOLLY: I think probably not. I think having lived independently for a long time, I really like my own space. So I think having to go back and figure out what roles and responsibilities are who’s would be really difficult. I think I’d fall back to being a teenager and expect my washing to be done, cooking to be done for me. So it probably wouldn’t be a good thing for me.
PHILIPPA: Well, talking of my son. There’s been a bit of negotiating around that. Molly, anecdotally, more Gen Zs and young millennials than ever are living at home now, aren’t they? Do we know how many?
PHILIPPA: It’s a lot. And that data’s 2021-2022. I’m guessing it’s higher now, don’t you think?
MOLLY: Yeah, we did see quite a spike during the pandemic as lots of people moved back with their parents during lockdown, but it’s been climbing steadily up. So yeah, I’d expect it to be a little bit higher now.
Why move back home?
PHILIPPA: So this is a huge shift, isn’t it? I’m interested to know, Simmy, why did you do it?
SIMMY: So, I’m Punjabi. So within our culture, we do live with our in-laws. So after you get married, you live with your in-laws. Some people stay living with their in-laws. I was with them for five years, so I had my first child while I was living with them as well. And it’s just something I grew up with. So it was quite normal, I didn’t have any other, “oh, I want to live by myself straight away”. I was quite excited too. It’s a nice way to get to know them and know your extended family. So all of my husband’s side of the family lived locally as well. I enjoyed it, it was good.
PHILIPPA: I can see how that’d be really lovely, that being part of the community thing. But were your friends at school, though, and all the people who didn’t come from that culture, did it seem strange to them?
SIMMY: I think, to be fair, most of my friends at school were part of that culture. I didn’t know any differently either. It’s only when I started working and I’d tell people that I lived with my in-laws for five years, that I realised. I was like, “oh, actually, this isn’t as normal as I’m making it out to be”. But yeah, it was more of a shock to people I worked with.
PHILIPPA: Sam, how about you? What prompted it?
SAM: Well, me and Bec lived in London for four years and we couldn’t save any money, obviously, because it bleeds you dry. You take a breath and it’s like £20. So yeah, we wanted to get the house. We wanted to get the mortgage and stuff like that. So we broached the idea to Bec’s parents, and luckily, they were into it. It was to save money for a house, and we did it, which was great. It worked.
PHILIPPA: And did you set a time frame on that at the start?
SAM: Yes, we stupidly said six months and it was 18 months - which is classic!
MOLLY: We hear lots of evidence of people moving back to live with parents, because we know that the private rented sector is extremely unaffordable, particularly in recent years.
PHILIPPA: Yeah, and it’s so very, very tough, isn’t it? Getting the deposit together, let alone the monthly payments.
SAM: Yeah, absolutely. Luckily, they didn’t charge us rent, so we were able to do it really quickly.
PHILIPPA: The big bulge in this number, I think it’s Gen Z, it’s young millennials. But it’s not just that, is it, Molly? Because there are people later in life, people going back because of childcare costs, people going back because they want to take on, or they have to take on, eldercare responsibilities. So are we seeing those numbers growing too?
MOLLY: Yeah, we’re seeing that lots of people are relying on grandparental care to help with childcare costs. We know it’s really expensive to put your children into private childcare. Grandparents are playing a really important role, particularly in helping, particularly mothers, move into employment. Yeah, lots of intergenerational support going both ways, I think.
Grandparents and grandchildren under one roof
PHILIPPA: Yeah, Simmy, could you see yourself doing it again?
SIMMY: Yeah, for sure. I think it’s a conversation I’ve had with my in-laws. We now live separately. My mother-in-law actually said, “go and have your own time together. It’s nice to have your own space for a while”. But we had the conversation, and when they need us in the future, and if we’re able to accommodate [them] in the house that we’re living in, then yeah, happily, because that’s what you do. You look after your parents, and I wouldn’t want them to live by themselves when they’re older either. I also want them to have proper time with their grandchildren.
PHILIPPA: And your kids are how old now?
SIMMY: Currently, they’re six and three.
PHILIPPA: So that time isn’t that far away then, potentially, isn’t it?
SIMMY: No, it’s not. But it’s nice as well because my husband was lucky enough to live near his grandparents for most of his life. So they passed away when he was in his 30s, and he loved that time with them. I didn’t have that time with my grandparents because my grandmother lived everywhere. She travelled around to live with her different daughters in different places.
PHILIPPA: Nice for her.
SIMMY: Yeah, it’s a lovely life to have. But I envied that he had that time with his grandparents, and I’d really want that for my kids as well with my parents and my in-laws as well.
PHILIPPA: As you say, it was a perfectly natural thing for you to do.
The social stigma of returning
PHILIPPA: But Sam, not in your culture. So when you went and put this idea on the table, did it go down well straight away?
SAM: It did for them. I think we had more reservations than they did, I think. Just because there’s a stigma moving back with your parents. For some people, it’s like, “oh, you’ve failed. You’ve gone out to the big world, and you’ve had to come back because you couldn’t do it” or something.
PHILIPPA: Much less now, particularly?
SAM: No, exactly. Yeah, we found that. Absolutely. After posting that video, we had so many people in the comments saying, “I’m living with my parents. My kids are with me. My grandkids are with me”. Then we even had friends message us and be like, “oh my God, me too”. We had no idea that they were also living with their parents.
PHILIPPA: It’s a whole community, isn’t it? I think maybe this isn’t so well known, actually, just how popular this is becoming.
Transitioning from in-laws to flatmates
PHILIPPA: But I’m interested to ask you about how it worked on the ground. Privacy, boundaries, who gets the bathroom first, all this stuff? How did you work all that out? Did you plan it, or did you just start and see how it went?
SAM: We were quite lucky at Bec’s parents. They’ve got two bathrooms, and they’ve got two reception rooms, so we weren’t fighting for the TV or anything like that. It’s not the biggest house, so you can - Bec’s parents would hear me wee in the morning and they’d always comment and be like, “oh, wow, you hold it in the whole night?” I was like, “really? We need to be talking about my stream in the morning”.
PHILIPPA: Just too much information between in-laws!
SAM: Exactly. You get a lot closer. We basically became housemates rather than family members.
PHILIPPA: Was that how it was with you, Simmy?
SIMMY: Yeah, we were quite lucky as well that my in-law’s had an en-suite and the main bathroom, me and my husband took over. So that wasn’t too bad. But we slowly started taking over the house a little bit once we had our little one. So we took over another room, and then the second reception room downstairs became ours and things like that. So it wasn’t too bad because even in the kitchen, my mother-in-law looked after the kitchen. I did cooking barely. It was all my mother-in-law.
PHILIPPA: We’re understanding why she liked going.
SIMMY: Yes.
SAM: Can I come?
Navigating bills and boundaries
PHILIPPA: What about boundaries around using each other’s stuff? I mean, big stuff like cars. Did you have a plan? Did it just evolve?
SIMMY: It was very much just sharing everything. We used to do each other’s laundry. It was very much a family unit. It was like, “whatever’s yours is mine”.
PHILIPPA: Sam, laundry. Did you do your in-law’s laundry?
SAM: No, but it did magically get done, which was really nice. It’s the quickest life cycle of a piece of clothing I’ve ever seen. Genuinely, you wear it and then you could get it the next day or even on the same day. So that did - Yeah, we were very fortunate.
PHILIPPA: But paying rent never came into the conversation?
SIMMY: Yeah, no, for us, it never came up. But we split bills and things like that. We’d do the shopping, and you’d help anywhere that you could. Any household bills and things like that, we’d pick up for one week, my in-laws might do the shopping, one week we might do it, that sort of thing. We tried to split it as equally as we could. But there wasn’t a big financial burden in that sense anyway, because my in-laws had lived in that house for a really long time and it was pretty much mortgage-free. So the costs weren’t huge.
PHILIPPA: Yeah, and your in-laws, Sam, they knew you were saving for a house or flat deposit.
SAM: Exactly. They wanted us to get out as quickly as possible. They didn’t want to slow us down at all. But we had a very similar situation where they were mortgage-free. It was just bills. We’d get a takeaway every so often. We didn’t pay Council Tax because they said they were paying that anyway. They just said they didn’t want to make money off of us.
Springboard or brakes on hitting milestones?
PHILIPPA: Molly, thinking about long-term financial consequences, still with this Gen Z, young millennial generation. But the ones moving back in, what does the evidence say? Does it act as a springboard for them, which is what you’d imagine, or does it hold them back?
MOLLY: Well, I think this is a really interesting question. For many young people, living at home is a deliberate, positive decision because they’ve got strong family connections or they’re trying to save for a deposit for their own house.
But we found that not all reasons are so positive. Some young adults might be forced to live at home because they’re finding it difficult to secure stable employment. For example, our research showed that young adults living with their parents were more likely to be unemployed, more likely to be in low paid work, and more likely to be employed on temporary contracts - compared to those not living with their parents.
Given this evidence, one concern that we had was that living with parents was limiting economic mobility, meaning that those living with their home were less able to move into better paid jobs elsewhere.
PHILIPPA: Yeah, it traps you in that situation.
MOLLY: Exactly.
PHILIPPA: And does it?
MOLLY: Well, actually, we found very little evidence to support that. In fact, young people living with their parents were just as likely to move into higher skilled jobs, get pay rises, and escape low pay as those who weren’t living with their parents. Actually, over five years, they tended to catch up with their peers not living with their parents, so just as likely to be in employment and no more likely to be in low pay. So definitely less of a trap than we thought it was in the past.
PHILIPPA: That’s good to know, isn’t it? Particularly now the numbers are getting so high.
What age are people buying their first home?
PHILIPPA: Obviously, when we’re thinking about buying a first home, like Sam was trying to do, the average age, it’s 34, is that right?
MOLLY: Yes. Home ownership is less attainable than it was in the past because we’ve seen decades of house price growth, outstripping earnings growth. We estimate that it’d actually take a typical young family 14 years to save for a deposit today, up from eight years in the mid-1990s.
PHILIPPA: 14 years?
MOLLY: Yes. It’s a really challenging situation to be in.
PHILIPPA: Do you think you’d ever have been able to do it, Sam, if you hadn’t made this move?
SAM: No, definitely not.
MOLLY: In our research, we look at the differences between generations, and we find that at age 30, 50% of baby boomers owned their own home, but the equivalent figure for millennials at age 30 was less than a third. So really stark differences between generations.
PHILIPPA: And of course, these cost pressures, they continue throughout life, don’t they? I’m thinking children, childcare, we all know just how expensive that can be now. Do we have numbers on that, Molly?
MOLLY: Yeah, we had lots of conversations about how difficult it is. But I think what’s important to mention in this context is actually, I think government support for childcare has been a bit of a success story.
As more mothers have moved into work, we found that spending on childcare among families with children under the age of five rose really sharply from 9% of disposable income in 2001 to 16% in 2016. But partly thanks to that expansion of free childcare hours in 2017, spending on childcare has actually fallen back again to 11% of disposable income in 2019. I think government policy has been successful in limiting that rising cost, which hasn’t been the case in other areas such as adult social care, for example.
Childcare subsidised by grandparents
PHILIPPA: If we’re thinking about young families moving back home, you can really see how that could be a very, very significant cost-saving, if your parents or grandparents are in a position to help out. I mean, is that something that you’d ever thought about, Sam?
SAM: Yeah, I’d do it if we had kids, I’m still a kid, so I couldn’t have kids.
PHILIPPA: I’m intrigued by how many grandparents actually want to do this now because we have this idea in our heads, don’t we, that our parents will love the idea of looking after our children. But of course, we’re all having kids later. They’re all working longer. And so at that point, grandparents can be quite old by the time a first grandchild comes along, or still working.
MOLLY: Yeah, definitely. So we found in our research that more mothers are moving into employment, the more mothers of young children. And we’d have expected the gap in childcare to be filled by grandparents and informal support. But actually, it hasn’t been. The amount of childcare that grandparents are doing has remained pretty stable since 2005.
I think that’s probably linked to the fact that grandparents are working later because of increases in the State Pension age, particularly for women. And also the fact that grandparents tend to be older so that’s linked to ill health, and also, therefore, they might be in a situation where they’re less able to provide support to young children.
PHILIPPA: Or geographically distant, because you don’t necessarily live handily, unlike Simmy, handily near all your in-laws. So, yeah, that’s amazing. In 20 years, it hasn’t gone up.
MOLLY: Yeah, exactly.
Savings on eldercare costs
PHILIPPA: Moving further on through life, I think, obviously, we’re an ageing population, as we’ve said. What about the implications for multi-generational households there? Because eldercare and loneliness, I mean, they’re really huge issues, aren’t they? There must be a role for families coming together maybe later in life, too.
SIMMY: It’s really important to look after the older generation because I’ve seen it since I was a child, and I like the thought of them not being by themselves when they’re older as well. I’d hate the thought of them just living by themselves.
PHILIPPA: Yeah. But thinking about intergenerational family wealth, if your parents get older and they need eldercare, I mean, looking at NHS estimates, we’re talking about over £40,000 a year for a live-in carer. To be honest, that sounds quite low, based on some of the stories I’ve heard. Serious money, and that’s money leaking out of the family as a whole, isn’t it? So even if you were thinking about it in a really hard-headed way as a young person, it might be more rational for you to go home, help your parents out, even if you weren’t that inclined to do it, rather than see years and years of that money disappearing out of their family coffers.
MOLLY: To protect their inheritance.
PHILIPPA: Yeah. I mean, to be really cynical about it. We’re not all as lovely as Simmy. For people who might not otherwise have thought about it, those numbers are so high now. It’s a real consideration. Or the house being sold, the family house being sold, to pay for eldercare, residential care. These are big decisions, aren’t they?
MOLLY: I think I’m less sceptical, and I think lots of people do it because it’s really rewarding. They want to help their family, and there’s a lot of love within the family.
PHILIPPA: We’re a money podcast. That’s why I’m dragging it back to money! Of course they do.
MOLLY: It’s true that residential care is - Private residential care is really expensive. We’ve not seen the expansion of public provision to keep up with rising demand. So people are spending a lot of money, that’s going to eventually eat into people’s inheritances. So, yeah, it’s definitely something that people might be considering when deciding as to whether to provide care for their parents.
PHILIPPA: Yeah, later in life. And you get big savings, don’t you? Like one car, not two. I mean, it’s a lot of money, isn’t it? As an on-cost going on forever. I’m wondering about people doing their eldercare provision and what that does to their incomes and what that does to their savings as well.
Findings from Carer’s Pension Gap report
PHILIPPA: Because you can see how if you just put it down on paper, this looks great. We’re saving money on that carer. But if you’re not earning, if you’re providing proper care, I think PensionBee has done some work on that.
SIMMY: Yeah. So we did some research on this. And in our PensionBee Carer’s Gap report, we found that there was an estimated £5,000 loss to your pension pot for every year you’re out of paid work.
PHILIPPA: So £5,000 a year less?
SIMMY: Yes.
PHILIPPA: That’s a lot.
SIMMY: Yeah, it’s a big chunk. One-in-three people take on caring responsibilities, and that might be for your child or for someone elderly within your home.
PHILIPPA: Yeah. Do you think women really think about that when they make these decisions? They understand the financial implications of those choices?
SIMMY: No, I don’t think so. Before joining PensionBee, I didn’t think about that whatsoever. When I had my first [child], I didn’t think about my pension whatsoever. I didn’t talk to my husband about topping up my pension or anything like that.
Whereas, when I had my second and I worked at PensionBee, I had read a lot of the content that we have, and I realised how important it was to talk to my husband about, “OK, I’m not making as much money now. You need to help me top up my pension because I need to make sure that my pot is just as good as yours when it comes to retirement”.
Staying in everyone’s good books
PHILIPPA: If people are listening to this and they’re thinking, “yeah, maybe I could do this”. I suppose it’s mostly going to be young people, but it might not be. It might be people living in strait circumstances in a house that they’re not happy with, and they’re looking at their parents’ house and they’re thinking, “why aren’t we all living together? Now there’s six of us or eight of us or whatever. Why aren’t we doing this? Or we could both sell, and we could buy something new”.
If they’re thinking of doing that, I think we’d like to equip them with some stories from you two about the good and the bad. So come on, share with the group, Sam. Tell me your worst and your best. Well, this is the worst we’re really interested in, if I’m totally honest.
SAM: The worst, the juicy bits. I’d say if you’re living with your in-laws, it’s really challenging to know which side to be on. If there’s arguments because people, like your partner might regress like Bec did, and there might be arguments. I’d say just stay out of it, basically.
PHILIPPA: Bec returning to her teenage years because she was living under her parents’ roof, like Molly said she feared could happen.
SAM: Exactly. Arguing about who’s drunk my milk and stuff like that. I’d say if you’re in the middle, just stay out of it. If you’re the partner.
PHILIPPA: Because it’s more complicated than flatmates, isn’t it? It’s not the same. We’ve all been there with flatmates and arguing about “who ate my yoghurt?”.
SAM: Yeah, the stakes are much higher.
PHILIPPA: People falling out. But they are, aren’t they? Because it’s long-term. It’s forever.
SAM: Exactly. You want to be in your wife’s good books, and you want to be in your in-law’s good books.
Working from the family home
PHILIPPA: Working under your in-law’s roof. So many of us are working hybrid or completely remote. You were doing that, weren’t you?
SAM: We were. We were both working from home, making videos for brands and stuff like that. Bec’s mum was also working from home. She’s a part-time Counsellor. So there was a little bit of - It was tricky, who gets the time? We’re not going to be screaming and making funny videos while there’s a serious counselling session downstairs. So there was a little bit of negotiation with who gets what time and stuff like that. So you’ve got to be really careful. It’s all about boundaries, really.
PHILIPPA: Simmy, you obviously genuinely loved it!
SIMMY: They were good, and everything comes with good and bad. So it was probably the alone time that was hardest for me and Hardeep because we were newlyweds. There was a lot of family time, quite a lot of the time.
PHILIPPA: Yeah. And with kids in the mix, there must be all that stuff around. Obviously, those of us who’ve already had kids. We think we know best about childcare. Quite tricky to be perhaps quite as determined about how you do things as you might want to be.
SIMMY: What was tough for us is with my first, we were trying to sleep train her, and we were told to just let her cry for a little bit. So it was like a minute, 30 seconds. And we started to do that process, and I was so worried about - I knew that my in-laws were obviously just going to be like, “no, don’t let her cry”. I literally waited for a weekend when they were away to sleep train my daughter. And she slept after that. I was like, it was all for good. So it was fine.
PHILIPPA: OK, that’s impressive. I didn’t sleep train my son in a weekend, I’m going to say.
SIMMY: She was particularly good. My second, not so much. It took her a lot longer. But we were living on our own then, so it was a bit easier.
But my in-laws are really good in the fact that there was a spare room that they let us make our own. They really adapted the upstairs for us. They made us a walk-in wardrobe and stuff like that.
PHILIPPA: OK. I think we all want to move in with Simmy’s family!
SIMMY: They were really accommodating. They tried really hard to make it our space. But yeah, there’s always going to be ups and downs with everything.
PHILIPPA: Yeah. I mean, it makes me wonder if we’re thinking about later life, when you’re doing it for reasons of helping out with childcare or eldercare, whether it might not generally be better, obviously there are tax implications of this, but if everyone sells what they’ve got and then you buy somewhere new, and you do this family commune idea, but in a new home that doesn’t actually, as such, belong to anyone?
SIMMY: Yeah. Ideally, that’s what we’d love to do. My ideal situation would be a family compound, but we don’t have the acres of land to live on. I’d happily live with everyone. I’m not sure if my sister-in-laws and everyone else would be as excited, but that would be my dream. Just a pool in the middle, just happy days.
SAM: That’d be my worst nightmare!
PHILIPPA: Well, I guess it’s an individual decision for everyone. It’s been great to hear about your experiences. Thank you very much.
SIMMY: Thank you.
PHILIPPA: If you’re enjoying the series, please do rate and review us. It really helps us reach more listeners like you. If you’ve missed an episode, don’t worry, you can catch up anytime on any podcast app, YouTube, or of course, if you’re a PensionBee customer in the app. We’ll be taking a short break in August but keep an eye on our feed because we’ll be sharing lots of bonus content over the summer to help you build financial confidence.
We’ll be going back to school in September with a brand new episode on whether parents should financially support kids going to university, and if they do, how they might go about it. Just a final reminder, anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice. When investing, your capital is at risk. Thanks for being with us. We’ll see you next time.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
