More adults turning to ‘bank of Grandma and Grandad’ for financial support

A “growing” number of adults are turning to the “bank of granddad and grandma” for financial support, new research suggests.

Almost a third of grandparents surveyed by insurance firm Saga said that they’ve lent or gifted money to their grandchildren, with the elderly family members forking out £2,119 on average.

Grandchildren between the ages of 18 and 40 were also quizzed about what they have been spending their inherited riches on. Twenty per cent of respondents said that they had used the money on holidays and 18 per cent said it had been spent on cars, the insurance and holiday provider found.

This was followed by 17 per cent saying they had used the cash to buy a first property and the same amount saying that it had helped with home renovation and improvement.

Researchers found that grandparents were more likely to pass on their wealth as they got older, with 64 per cent of people over 85 lending or gifting money to their grandchildren. This was compared to 35 per cent of 75-84-year-olds and 27 per cent of 65-74-year-olds.

Of those that had lent their grandchildren money, attitudes varied about whether they expected to receive any of it back. Grandparents in Plymouth were the most likely in the UK to expect the money to be paid back, with 48 per cent wanting it to be paid back in part or in full.

Forty per cent of those in Brighton or Cardiff wanted to be paid back, but only 17 per cent of those in Belfast expected repayment.

Lisa Edgar, chief consumer officer at Saga, said the research “points to a growing dependence on the support of grandparents, which reflects the unprecedented nature of the last few years and the impact it has had on people’s finances.”

She added: “It also shows they want their grandchildren to succeed and get the most out of life.”

By 2040, 63p in every pound in the UK will be spent by someone aged 50 or over, according to the International Longevity Centre (ILC). However, older consumers often underspend over fears that they will run out of money, Dr Vivien Burrows, senior research fellow at the ILC, said.

Saga commissioned a survey of 1,000 grandparents aged 65 and over and 1,005 grandchildren aged between 18 and 40 in December 2022.