Young adults living at home with their parents are saving a total of £17.1billion a year in rent and living costs, according to a new study.
According to thinkmoney.co.uk, the average cost saving of living at home compared to living alone in a one-bedroom flat is £12,450 a year.
Around 3.3 million young adults aged between 18 and 24 are living with their parents and the savings are as high as they are because 42% of them do not pay rent.
That means 1.37m people are saving more than £12,000 a year from living at home, but it isn’t just the cost of renting a room or flat that they save on either.
Council tax, utility costs, broadband, food and even cleaning products are provided by parents, all providing levels of savings.
A breakdown of potential savings
The study suggests that average monthly rent for a one-bedroom flat is around £528 a month – an overall saving of £6,336 annually.
Council Tax, when including a single person discount, costs £61.42 a month or slightly more than £737 for a year on average.
Add to that a monthly food spend in the region of £250 a month and other living costs, including utilities at an average of £200, and savings of around £5,400 a year can be made.
Estimates place potential average savings to be £1,037 every month, all as a result of living at home with parents.
It is important to stress that the cost of living varies wildly across the UK, so the figure mentioned represents a national average.
Considering the future and moving out
Among the reasons for young people continuing to live at home included not being able to afford a place to rent or not being able to buy.
Some 27% of 18 to 24-year-olds still living at home said they saw it as an opportunity to save for a deposit in the future.
The cost of moving into a first flat was most expensive in London and was substantially higher than the UK average, with the average cost of living alone £21,657.
That compares to Teeside – the cheapest location in England and Wales – where moving into a new place could cost an average of £10,767.
The cheapest London borough to live in as a single person was Bexley, although that would still cost £14,226 annually.
Meanwhile, Chelsea was the most expensive London borough, costing nearly £40,000 a year for someone to live on their own – nearly four times the cost of living in Teeside.
Saving and managing money
For young people looking to manage their finances that they have saved as a result of living at home, loading funds on to a prepaid card could help to control spending.
A prepaid card limits spending to the amount on the card at any given moment and is not directly linked to a bank account, making funds safer.
The cards can easily be topped up or replaced if required, while accounts can be checked regularly online if needed.