Grandparents dip into savings to support younger generations
Nine in ten grandparents have given cash and loans to their grandchildren since 2012 according to a survey conducted by LV=. While grandparents gave an average of £30 a month, some have given their grandchildren as much as £50,000.
More than half plan to help their grandchildren again in the future, earmarking an average of £1,000 over the next five years for this purpose.
Almost half of grandparents give their grandchildren pocket money – 15 per cent do so regularly – and 17 per cent have contributed to their grandchild’s trust fund or savings account in the last five years. One in eight has put money towards a big-ticket purchase like a holiday or a car.
Almost three quarters say that they give their grandchildren money because they want to help out where they can, while 16 per cent say that they help out because the child’s parents cannot afford to do so.
Richard Rowney, life and pensions managing director at LV=, said: “The generosity of grandparents in Britain is clear to see and it is great that so many feel comfortable enough to be able to help out their family and plan to continue doing so. However, the average retirement is now much longer than past generations and people’s lifestyle and associated costs are likely to change over the period.”
LV= found that six per cent of grandparents are already thinking about taking advantage of new pension rules – which will allow retirees to withdraw their entire pension pot as a cash lump sum from April 2015 – to help their grandchildren.
Rowney continued: “It is important that those approaching retirement choose to structure their income in a way that offers them enough financial flexibility to enable them to remain generous, but also adapt to their changing needs.”