Over 50s are increasingly financing not just one, but two generations; boosting spending money, gifting lump sums, or providing childcare – totalling £53bn per year according to new research from Saga. The research has revealed that 69% of over 50s provide financial support to their children and 57% to their grandchildren. In fact, four in ten (42%) are providing financial support to both generations.
Nearly a third (31%) of the over 50s have gifted lump sums to their children in the last five years – with an average gift of £13,862 per child and almost a fifth (17%) have given their children additional spending money, on average £1,361 per year. On top of these cash injections, grandparents are also frequently providing free childcare. Nearly a quarter (22%) of over 50s provide free childcare to their grandchildren – providing, on average, 15 hours each week. Based on average national day nursery costs, this is saving parents an additional £294 each month.
In addition to this support to their children, over a fifth (22%) of those over 50 also provide their grandchildren with spending money, totalling, on average £534 each year, and nearly a quarter (23%) of over 50s put on average £508 per year into a dedicated account for their grandchildren. As well as this, 21% of over 50s provide their grandchildren with lump sums of money for specific items. The average for this is £3,660.30 in lump sums over the last five years, rising even higher to an average of £4,616.40 among retirees.
Jeff Bromage Managing Director, Saga Money said “With rising living costs and incomes increasingly squeezed, 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. 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.”
“However, it’s not all about the financial needs of their family – as many grandparents relish the opportunity to spoil their children and grandchildren – and rightly so. Whilst many have saved hard throughout their lives to ensure they can continue to pursue their passions, many also want to see their families enjoy any financial gifts they can afford to give them. The’ Bank of Nan and Grandad’ is often less focussed on the monetary aspect and simply an opportunity for families to spend quality time together – and this is something we hope to see continue.”