Should you charge your child board or rent?

The number of young adults living with their parents has reached an all-time high, with more than 1 in 5 families living with their adult children.

The number of families living with adult children in England and Wales rose by 13.6% between 2011 and 2021. Nearly 3.8 million families share a household with their adult children, Census 2021 has revealed.

The reasons for these adult offspring living at home can vary, but we tend to see the same reasons time and again: saving up for a house deposit, or they simply can’t afford to move out.

So the big question is, should you charge your child board or rent, or let them live at home for free? We take a look at the arguments for both.

The Cost to Parents

As parents we want to support our children and give them the best start in adult life as possible. Our hearts, and our accounting heads on behalf of our children, therefore often don’t argue with the need for our adult children to stay at home for a while yet. However, when it comes to the impact this has on your own finances, you may be inclined to change your opinion. In fact, according to an article in the Telegraph, these young adults are costing their parents in the region of £5,000 per annum.

This has direct knock-on effects for parents. Perhaps they are not only subsidising living costs, but also saving towards that elusive first house purchase? They may also be diverting funds away from retirement savings or putting off retiring itself?

So, should you be charging your adult child board or rent? If so, how much? Or, are there other ways that they can ease the financial load on parents?

Charging Rent

Deciding whether to charge your child rent is an individual decision, with discussions typically beginning in the mid-teens. Once your child is bringing in their first pay packet from a weekend job, you may start re-evaluating how much they get in their monthly allowance, for example. It’s natural that as time goes on this may gradually move to a board or rent charge as your child earns more.

This is a valuable lesson for young people about the costs of living. As a parent you can choose whether to use that money towards the household costs (and mortgage) or whether to put it away for your child to use towards a deposit on their first home.

Almost inevitably, the parents will find themselves, once again, facing the parental guilt – should they be charging their child? This is when it is good to remember the importance of teaching our children financial literacy and independence. It also allows everyone to feel valued for making their contribution to the family.

How Much Board Should I Charge my Child?

In order to decide whether to charge your child rent or board, and how much, you need to start by sitting down and thinking about what expenses you need to cover.  Once you have a good understanding of this you can work out a fair amount to charge your kids for rent. There are a few ways you can do this:

There are a number of different ways of deciding how much the young person should pay. Should you charge a set amount, or a percentage? Should you base it on their earnings?

  • A set amount – You may decide to charge your child a set amount that covers the food they eat each month. This will allow them to start saving money for a place of their own.
  • A percentage of their income – This means the rent goes up as their earnings do.  This will encourage them to move out when they can afford to do so.
  • A percentage of the household bills – You could split the total amount of the household bills equally by the number of people who live in the household. Allowing everyone to be more aware of how much water, electric and food they are consuming in order to keep the bills down.
  • Contribute to the household in a different way – Instead of payment, you could ask your child to contribute by doing weekly chores such as keeping the house clean, doing the food shop, taking the bin out etc.

How much board you charge is up to you and should depend on your individual circumstances.

Deciding What’s Best for Your Family

The important thing is to decide together what will work, what is needed, and what is fair. It should never be sprung on the child if you don’t want a temper tantrum whisking you back into early teen strops. So sit together, be realistic about what they cost, and seek openness about their earnings. Use everything from supermarket receipts to electricity bills and establish what the costs are.

From here, you can begin to get a picture of what is fair. It is very unlikely, certainly at the beginning of this road, that the child will be able to actually cover their costs. Even if they do, you don’t want to convey the message that working is futile because all money goes to Mum and Dad.

Always keep communication about household money open. If you’re charging board or rent then it’s a perfect time to teach lessons about finances for the future, standing them in good stead for when your children fly the nest.

Don’t forget, deciding whether to charge your child rent is an individual decision, sit down, have a think about it and try to come up with an arrangement that is fair for all.