The Bank of Granny and Grandad becomes a top three lender
Research from a products and services provider for over 50s reveals that the Bank of Granny and Grandad is open for business and has become one of the top three sources for financial support.
Parents are the most likely to receive requests for support at 45%, followed by the bank at 22% and then grandparents at 15%, according to a survey by Saga.
Almost a third (29%) of grandparents have lent or gifted money to their grandchildren. For those between 75 and 84, this increases to 35% and for grandparents over 85, this figure almost doubles to 64%.
Almost half (48%) reveal they have no preference on how the money is spent, but a fifth (20%) state that a property purchase is preferred with education coming in third at 18%. Holidays, home renovations and childcare costs all took up 3% or less.
Grandparents in Bristol are the most like to expect repayment at 52%, followed by 48% of those in Plymouth and 37% of London. Those least likely to expect that their grandchildren pay them back are in Edinburgh and Belfast at 26% and 17% respectively.
Over three quarters (78%) of grandparents who expect to be repaid want to know what the money will be used for. Two fifths (40%) of those handing over an early inheritance agree, but over half (56%) of those passing on gifts do not mind.
The majority (20%) of grandchildren shared that they would spend the money on holidays over cars (18%) or a property (17%). The same amount would use funds for home improvements, and just under that at 16 per cent would pay for education costs.
The mean total amount loaned or gifted by grandparents is £2,119.10. A quarter (25%) have provided over £1,000 and a fifth (20%) have shared between £100 and £199.
Grandparents supporting loved one in time of need
A representative at Saga said: “We’ve long known about the Bank of Mum and Dad but as people live longer and economic times change, here at Saga, we wanted to investigate if the Bank of Grandma and Grandad was now open for business. Our research reveals that grandparents around the country consistently contribute to their families financially, but surprisingly many have no preference on how their grandchildren spend the money.
“Supporting loved ones in times of need is a priority for many grandparents as a majority who have lent, or gifted money previously are happy to do so again. Life is made for living, and while many grandparents prefer to spend spare money on their grandchildren rather than on themselves, it is positive to see that grandparents do also prioritise themselves, choosing holidays, gifts, and home renovations as their preferred ways to spend spare money.”