SUMMER is over, heralding a return to the family home for thousands of newly graduated children. Research by NatWest suggests that more than one in five graduates comes home, bringing not only piles of laundry, but also plenty of debt and a wish list of new financial goals for which they want parental help.

This boomerang generation can be a source of financial tension for their parents. Here, we outline some of the strategies that parent can use to help young adults to gain a more sound financial footing and prepare to flee the nest for good.

To charge or not to charge?

You may think that only the hardest of hearts would charge bed and board when their debt-ravaged offspring return home from university. Yet this is exactly what many advisers suggest. Donna Bradshaw, of IFG Financial Services, says, “Letting them stay gratis does not send the right message. Parents who charge rent help their children to take responsibility for their cash and prepare them for renting or paying a mortgage.”

When your son or daughter starts earning, work out what a reasonable amount would be once any debts have been taken into consideration.

Debt rescue

A recent survey by Push.co.uk showed that the average graduate debt is £17,000. Your help in tackling your child’s debt could be invaluable, but this need not always mean wiping out their borrowings with a lump sum. James Ketchell, of the Consumer Credit Counselling Service, says: “Help your child to work out which are priority debts, such as unpaid council tax, and which can wait, such as student loans.”

Bear in mind that when a graduate switches his or her billing address back to the family home, it could affect the parents’ credit ratings. If you think this may be the case Mr Ketchell recommends asking credit reference agencies, such as Experian and Equifax, to put a note on your file explaining your situation.

It’s your future as well as theirs

Research by Scottish Widows indicates that more than ten million young adults have eaten into their parents’ savings, with the average handout being £12,300. It recommends that parents prepare by creating their own savings fund for their children, but if it is too late and your cash-strapped offspring have already returned, then work out how any pay-outs might affect your future. Nick Bamford, managing director of Informed Choice, the independent financial adviser, says: “Be realistic. Will giving them large amounts of cash mean pushing back your retirement?”

If you are set on giving your child cash to cover housing costs or clear debts, it may be an idea to speak to a financial adviser about the most cost-effective way of funding your generosity. For example, through releasing equity from your home or cashing in certain savings.

Get them into their own home

Nearly a fifth of graduates turn to parents to help them to get on the property ladder. But if your finances are already ravaged after years of supporting your children, there are alternatives. David Hollingworth, of London and Country Mortgages, the mortgage broker, says, “Many lenders offer guarantor mortgages. Parents sign up to step in if the children struggle with the repayments, but they are not required to pay anything unless things go wrong.”

CASE STUDY

NATALIE GEORGION, of Cardiff, opted to live at home after graduating from the University of Glamorgan in Pontypridd two years ago.

The 24-year-old trainee accountant, pictured with her mother, Hilary, and father, Athanasious, says: “We sat down and worked out what a suitable contribution from my salary would be, so I do pay rent. But Mum pays for everything else, including bills.”

Her mother, a 56-year-old teacher, says: “It is tempting to say that rent doesn’t matter but I felt that it was important that money was coming out of Natalie’s account every month.”

With the help of both parents, Ms Georgion is buying her own home, secured after her parents acted as guarantors on her mortgage. “Many of my friends went back to their parents, but we are all thinking about moving out now and looking forward to stepping out into real life,” Ms Georgion says.

London & Country Mortgages, the mortgage broker, found Ms Georgion a fixed-rate deal with Cheltenham & Gloucester Building Society. Ms Georgion expects to move into her newly-built property, only a mile from her parents’ home, next month.