Economic struggles delay empty-nester stage as parents support adult children at home

Despite a slight reduction in the official unemployment rate in the first half of the year, joblessness is not only affecting young people but also parents, who have to bear the financial responsibility for their children a little longer.

The University of Cape Town (UCT) Liberty Institute of Strategic Marketing’s Forerunners Report (Over 55s), published yesterday, revealed that SA’s population aged 55 and above have remained active, with many continuing to work, which experts said was valuable in a struggling economy.

Unemployment keeps adult children home

However, the research also showed that 64% of middle-class parents aged 55-60 had children living at home because of slow economic growth, the high cost of living and unemployment.

“This means the empty-nester stage, when adult children become independent, appears to be happening later, leading to parents bearing financial responsibility for a longer period,” Paul Egan, managing consultant at the institute and co-author said.

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“At the same time, the study found that nearly two-thirds of middle-class individuals aged 55 to 60 expected their financial position to improve over the next five years. This is likely connected to an anticipated windfall when financial responsibility for children ceases.”

James Lappeman, head of projects at the institute, said it was not just a SA phenomenon.

“The ability to become fully independent, even for graduates to buy a house, is taking a little longer because looking at the economy 20 years ago, it was almost the same cost of buying a car.

“Now, 20 years, later it is almost three times the price. There’s been a major shift in the economy that have made things like buying a house more expensive.”

Lappeman also noted the shift in mentality and behaviour.

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“SA’s population aged 55 and above is redefining ageing and reshaping consumer behaviour.”

They are now savvier with money – with many of them looking at a comfortable retirement. He said while unemployment was still a challenge in SA, a lot of the narrative around it was about youth, while the older people were already experiencing financial independence – having paid off their houses, cars and debt, and starting businesses or even putting their skills elsewhere.

Parents still economically active

Despite mainstream businesses ignoring this age group on the basis that they want to catch their customers young and try to keep them for life, Kroshelan Chetty, experience and journey management executive at Liberty said the group was staying economically active for longer, and also reimagining traditional models of retirement.

“Our commitment to this kind of work lies in continuously gaining deep insights into our diverse audiences, allowing us to create tailored solutions and services that align with their unique needs and life stages,” Chetty said.

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“We are addressing the needs of this segment, with a focus on helping them with their transition to this next chapter of their lives.

“Dispelling the notion that people shift from being producers within the economy to becoming solely consumers once they have retired, is fundamental to unlocking the immense potential and opportunity that exists,” said Chetty.

– reitumetsem@citizen.co.za