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Banking on gramps: 13% of grandparents support adult grandchildren

Cherry Reynard
Written By:
Cherry Reynard

Wealth is trickling down the generations, according to a new report from OneFamily, with 13% of UK grandparents providing regular financial support to their adult grandchildren.


This is more than the children’s parents (7%), and most provide this support on a ‘no-strings attached’ basis (73%). As concerns rise about ‘intergenerational fairness’, this generosity appears to be driven by concerns for the millennial generation’s financial future, with seven in ten grandparents (69%) worried that their grandchildren will find it difficult to get on the property ladder.

The sums involved can be large: One in 10 UK grandparents (10%) have given their adult grandchild a cash lump sum of £15,000 on average with nearly half (42%) of these gifts used to help grandchildren on to the property ladder. Grandparents also help out to pay off debts (23%) or to support ongoing education or training (25% of all regular payments), followed by paying for a holiday (21%) and simply helping with monthly bills (20%).

This shift supports recent research from independent think-tank the Resolution Foundation, which found that grandparent households are holding an increasingly large amount of total UK wealth. In 2017 pensioner households have a larger percentage of wealth than working households for the first time since official figures began, with pensioners now £20 a week better off.

The majority of contributions come at no cost to the grandparent’s own financial wellbeing (71%), with 40% funding them from their own savings.

Georgina Smith, managing director of Lifetime Mortgages at OneFamily said, “We expect parents to provide their children with support, but our research highlights just how important the contributions of grandparents are. As the cost of living squeeze continues and buying a property feel more unachievable for members of the younger generation, it seems the nation’s nans and grandads are stepping in.”

Grandparents making gifts will need to consider inheritance tax to the extent that their estate is more than £325,000 (£425,000 if it includes the family home). They have an annual gift allowance of £3,000 and can also make gifts for special occasions, such as weddings and birthday. Everything else is considered a ‘potentially exempt transfer’ and grandparents need to survive for seven years for it to fall out of their estate.