19 Oct 2018 New research from Charter Savings Bank reveals that 40% (over 5.8 million) of grandparents give their families cash handouts every year worth an average of £1,475 each, as well as the equivalent of one month’s free childcare.
Children and stepchildren are the main beneficiaries, receiving £743 a year, while grandchildren collect around £450.
Of those grandparents who gift money, the majority (61%) do so because they want to pass their wealth to their family during their lifetime, while a third extend a helping hand to help family members who are struggling to make ends meet.
Grandparents’ cash is most likely to go towards the younger generation’s living costs (30%), holidays (21%) and home improvements (19%). One in six (15%) say they are helping towards a home deposit, while 12% are clearing university debt.
It’s not just the younger generation receiving a helping hand; the research shows that 5% of grandparents are also providing financial support to their parents too.
On a regional basis, the most generous grandparents are based in Yorkshire and Humberside who donate a whopping £2,298 every year. In a close second are grandparents living in London (£2,043) followed by the East Midlands (£1,929) and the South East (£1,723).
Grandparents contribute one month’s worth of childcare
As well as cash, two-thirds (65%) of grandparents have given up their time to look after grandchildren and great-grandchildren, spending an average of four hours per week. When rolled out over the course of a year, and assuming a 7.5 hour working day, grandparents are providing 28 working days of free childcare annually. Assuming the national minimum wage of £7.83 per hour2, grandparents are providing £1,629 of free childcare – collectively worth £4.3 billion.
While most grandparents can afford to be generous, over a third (37%) admit to having to make lifestyle changes including fewer holidays (58%) and postponed or cancelled home improvement plans (37%).
Paul Whitlock, Director of Savings, Charter Savings Bank, said: “Rising living costs and squeezed family incomes mean that grandparents are having to ride to the younger generation’s financial rescue. In many cases grandparents find it hard to say no and while they like being hands-on, the risk is that they compromise their own standard of living.
“Savings accounts play a key role in grandparents’ ability to finance the younger generation, so it’s important to check they’re getting a competitive rate. Many grandparents have built up sizeable nest eggs thanks to years of saving regularly. Passing this habit down through the family will help to ensure that future generations can also benefit from a financial leg-up.”
Regional breakdown of financial contributions
|Region||Financial support given by grandparents each year|
|Yorkshire and Humberside||£2,298|
|East of England||£877|
Source: Charter Savings Bank, 2018
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