Short answer
Traditionally, the bride's parents hosted and paid for the engagement party, but today it is much more flexible. Often the couple pays for it themselves, or parents from either side offer to host. There are no fixed rules.
In the past, the engagement party was often hosted by the bride's parents as a way to announce the engagement to their social circle. That tradition has faded. Now, the couple usually organises and pays for their own engagement party, especially if they are older or financially independent. Sometimes both sets of parents split the cost, or one side offers to host as a gift. Some couples ask their parents to contribute, but that is a personal decision.
If parents offer to pay, it is kind to accept, but also be clear about the guest list and budget so there are no surprises. If you pay yourself, you have full control over the scale and style. You can keep it very simple, like a picnic or a pub gathering, to keep costs down. The key is to agree early who is paying and how much, so no one feels awkward.
Remember, there is no legal or social obligation. The engagement party is optional. If money is tight, skip it or make it very casual. Your wedding is the main event. Spend your resources there. Whatever you decide, communicate openly with anyone contributing, and thank them warmly.
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