Four in ten saving to support grandchildren’s future

Nearly four in ten parents say grandparents are saving for their children’s future, helping younger generations prepare for major milestones including university, driving and buying their first home, new research from Paragon Bank has found.

The study found that 39% of parents said grandparents were putting money aside for their grandchildren. Among those families, university or further education was the most common savings goal, cited by 27%. More than one in five said grandparents were saving towards driving lessons (22%), a first car (22%) or a deposit for their grandchild’s first home (21%).

Other grandparents are building a more flexible financial foundation, with 24% planning to let their grandchild decide how to use the money and 16% saving to provide general financial support in adulthood.

The findings show grandparents are supporting younger generations in a range of ways. Of those whose child currently or previously received help, 17% said grandparents regularly paid into a savings account, while 14% made occasional savings contributions. A further 12% saved in their own name for the child and 10% contributed to an investment account.

This longer-term saving forms part of a broader pattern of financial support from the bank of grandparents. Nearly two-thirds (61%) of parents received financial help from their children’s grandparents during the previous 12 months.

One in seven parents (14%) received support regularly, while more than a third (34%) were helped occasionally and 13% benefited from a one-off contribution. Among respondents able to estimate the amount provided, the average reported figure for regular financial support was £262.

Grandparents are also helping families cover more immediate costs. Two in five parents receiving support said grandparents had paid for clothes and shoes, while 34% received help with school uniforms, equipment or other school-related costs.

Almost three in 10 (29%) were supported with food, groceries and everyday essentials, while grandparents also contributed towards days out and family experiences (26%), school trips (24%) and family holidays (18%).

For many families, this support is easing financial pressure. More than a quarter of parents who had received help (27%) said it enabled them to manage an unexpected expense, while 23% said it helped meet everyday household costs.

Almost one in five (18%) said the support had improved their household’s financial security, with the same proportion saying it had reduced their need to borrow or use credit. More than one in five (21%) said it had reduced their reliance on their own savings.

Andrew Wright, Head of Savings at Paragon Bank, said “Grandparents are playing an important role in helping younger generations prepare for their future, with many putting money aside for major milestones such as university, driving lessons, a first car or a first-home deposit.

“These goals can feel a long way off when grandchildren are young, but saving regularly over time can help build a meaningful financial foundation. Even modest contributions have the potential to grow and provide valuable support when grandchildren reach some of life’s most important and expensive moments.

“Alongside helping families with costs today, grandparents are giving their grandchildren a valuable financial head start for the future.”