KUALA LUMPUR: Parents in Malaysia are not cutting the financial umbilical cord, with 57% of people with children over the age of 18 still giving them regular financial support, according to HSBC’s new the Power of Protection study, Facing The Future.
The study highlights parents’ ongoing commitment to their children, as well as the financial pressures faced by younger generations. The Power of Protection is an independent consumer research study into global protection needs and trends, commissioned by HSBC. It provides authoritative insights into people’s concerns about the future and how they are protecting themselves financially, around the world.
The survey was conducted on a sample of 1,000 Malaysians aged 25 and more.
The study is the third in the series and represents the views of 13,122 people in 13 countries and territories namely Argentina, China, France, Hong Kong, India, Indonesia, Malaysia, Mexico, Singapore, Taiwan, the United Arab Emirates (UAE), the UK and the US.
The study uncovered that parents in Malaysia are ranked fourth globally in financially supporting children into adulthood. The UAE tops the global table of the highest proportion of parents still supporting grown-up children.
The study in Malaysia shows it is very common for parents to support children well into adulthood. Almost half (50%) of those supporting an adult child have been doing so despite most parents (64%) believing that their children should stand on their own two feet financially.
Education is the area where most parents (69%) are providing financial support, while 41% are helping with everyday living costs such as utility bills, groceries and home repairs. They are also helping with medical and dental care (38%) and rent/accommodation costs (27%). Over one in four (29%) are even helping to paying for holidays.
Most parents supporting grown-up children feel good about helping their family, with 62% feeling appreciated for the support they give and 63% feeling they are a good provider for their family.
Providing this ongoing financial support comes at a cost, but it appears to be one that most parents prioritise. Parents are spending an average 33% of their disposable income on supporting grownup children and 49% are spending less on themselves in order to have more for their families.
However there can be significant knock-on effects to parents’ long-term financial planning. About 67% of parents supporting adult children would prioritise paying for their child’s university/higher education over their own retirement fund, and 30% had to withdraw from their own savings and investments to support an adult child, while 17% have incurred more debt.
A significant minority of parents say their adult children would not manage at all financially if they themselves developed a long-term illness or disability (22%), if they had to significantly reduce their financial support to them (16%) or if they were unable to work (16%).
Yet 54% of parents supporting grown-up children do not have insurance that would pay them if they had a serious illness or accident that prevented them from working, and 52% do not have life insurance.
Source: The Sun Daily