Grandparents are paying for all of us

It’s essential grandparents do not compromise their own finances in order to provide free handouts

THE Bank of Nan and Grandad is handing out £53billion each year to support two generations as families struggle with the rising cost of living.

More than two-thirds of people over the age of 50 are providing financial support to their children, and around half are helping grandchildren.

And research from Saga shows four in 10 are dishing out cash to both generations.

Almost a third of over-50s have gifted lump sums to their children in the last five years, at an average £13,862 per child, and almost a fifth have given their offspring additional spending money, at an average of £1,361 per year.

In addition to this support, one in five gives spending money to grandchildren, on average £534 each year, and almost a quarter put £508 per year on average into a dedicated account. Meanwhile one in five give grandchildren lump sums for specific items at an average cost of £3,660.

On top of the cash injections a quarter of grandparents provide free childcare – typically around 15 hours each week.

Based on what the average national day nursery charges, this is saving parents £294 every month.

Jeff Bromage, managing director at Saga Money, says: “Many grandparents are now being called upon to provide substantial financial support to their wider families.

“In many cases, in addition to regular cash top-ups, nearly a quarter are providing hands-on support in the form of free childcare.

“As this becomes a growing trend, it is essential that grandparents do not compromise their own finances in order to provide these free handouts.”

While it’s good that the older generation is helping the younger ones with their finances, it’s vital they don’t risk their own financial security and leave themselves short of cash and unable to manage.

Jeff adds: “We strongly encourage both parents and grandparents to ensure they are in a viable financial situation to offer this help and are not at risk of subsequently leaving themselves vulnerable.

“It’s not all about the financial needs of their family. “The bank of Nan and Grandad is often less focused on the monetary aspect and simply an opportunity for families to spend quality time together – and this is something we hope to see continue.”