Kippers for breakfast…
… and lunch and dinner, it seems, with increasing numbers of adult children not leaving home. So what impact is this having in our economy? And their baby boomer parents?
“KIPPERS” describes adult children still living at home with their parents. In many cultures, the idea is far from new: families live together in large homes or compounds, and just keep extending the generations. But in our modern, Western culture, it is viewed as an oddity. Or viewed with jealously — depending upon who’s doing the viewing.
Investopedia cites several studies where most parents say they like living with their kippers. The problem is, the parents usually save less than they otherwise would for their retirement — particularly when compared with empty nesters, whose higher discretionary income can make it much easier to save for retirement.
According to WordSpy, “kipper” was coined by a British building society as an acronym for “Kids In Parents’ Pockets Eroding Retirement Savings”. The term is somewhat harsher in Japan. There, “parasite singles” are considered a serious drain on the ageing population. (Although Western cultures can counter with the nearly-as-harsh acronym SLOPS: Singles Living Off Parents.)
Kippers differ from their “boomerang” cousins, in that the latter left home. Then returned. Usually this is related to financial problems.
But no matter whether they actually left or not, according to a report in the US publication The Christian Science Monitor, parents of both kippers and boomerangers — certainly in Western countries — enjoy their adult children’s company, and are keen to have them around.
Australian Bureau of Statistics figures show 21% of people in their 20s lived with their parents in 1976, rising to 30% in 2001. Research by Quantum found by the mid 2000s, that proportion had risen to 36%. Flip that around, and more than half a million Australians aged over 55 are still living with their adult children. (In Britain, there are purported to be one million kippers.)
In whichever country they reside, many kippers lead the life of Riley. According to Neilsen Media Research, carried out for Wizard Home Loans, half the Australian kippers pay no board. (It’s a similar story overseas, where British paper The Herald reported that while nearly half of the adult children living at home worked full-time, 58% of them paid no board.) Of those who do shell out, the figures are nowhere near what it would cost to rent — let alone add food and utilities bills on top.
Economic impact
The immediate economic effects of the kipper phenomenon are on housing, parents’ saving for retirement and their delayed retirement.
The Nielson researched showed just 9% of 55-to-60-year-olds with kippers were retired, compared with 16% without kippers. Their working week was also an average 1.5 hours longer (totalling an average 36.1 hours).
And with kippers not covering their own costs, the research showed nearly half those surveyed said they had less disposable income.
Studies by Quantum highlighted the effect of kippers on the property market.
In an article in The Age earlier this year, social analyst David Chalke was quoted as saying four and five-bedroom houses weren’t flooding the market because many still had adult kids happily living there with their parents.
However, Chalke told a publication for Tasmanian real estate agency Towns Shearing, that escalating house prices weren’t preventing Generation Y from buying their own homes.
“The house price argument is as much an excuse as a reason — many of them could afford to buy a one-bedroom apartment… it’s really a combination of convenience, not wanting to commit to anything, and compliant parents.”
There are two upsides to adult children remaining at home. Firstly, there’s the potential to stimulate the housing market if kippers did leave home, thus exacerbating housing affordability. Secondly, says Clive Hamilton, executive director of The Australia Institute, there’s an environmental benefit through less potential single-person households, and thus a lower eco-footprint.
Conclusion
Parents of kippers need to ensure they adequately save for retirement, as the potential to erode their own savings (or even their capability to save) in supporting adult children, is high.
Kipper parents could also suggest a savings scheme for their adult children. Even those parents who have no desire to see their kippers leave home any time soon, can help their adult children very practically by suggesting a financial scheme, with goals.
Tags: adult children, Baby boomer