A new report titled “Grandparental Generosity” looks at the levels and patterns of financial support from grandparents using the 2010 wave of the English Longitudinal Study on Ageing.
The research, which was supported by Partnership and Key Retirement, found that grandparental givers are typically well-off relative to non-givers reporting higher levels of income and financial wealth.
They also had substantially higher income from annuitized sources like private pensions. Degree holders gave a much larger amount on average compared to the other groups.
Brian Beach, research fellow at ILC-UK, said: “This research reveals that millions of grandparents are providing financial support to younger generations.
“For grandchildren, these transfers are likely arriving at a crucial transition point, impacting educational and housing opportunities.
“As people live longer and society ages, grandparental giving may have an increasingly important impact on the social mobility of grandchildren.”
Ged Hosty, managing director of equity release at Partnership, added: “As families become increasingly financially stretched and time-poor, grandparents are stepping in more and more to provide support.
“However, while this trend is to be welcomed as it helps to draw families closer together, it can put a strain on the grandparents finances that they may struggle to recover from.
“Therefore, it is vitally important that people consider all their assets – including their homes - ahead of retirement and take steps to ensure that they can provide as much help as needed without detriment to their own retirement aspirations.”
Dean Mirfin, group director, Key Retirement Solutions, said: "It is evident that with extended generations increasingly amongst today's population that grandparents are opting to help with their grandchildren, not just in terms of time but also financially.
"Grandparents in many cases are taking a pragmatic view with regard to this financial support seeing it as inheritance at a time when money is needed most or has the potential to most influence the financial well-being of the rest of their families.
“For many being there to witness the impact of their support is a key driver to gift at the right times, and to direct how that support is used, and this is a trend we expect to see continue."
