Grandparents giving millions to grandchildren

Data analysed by the International Longevity Centre UK from a 2010 research panel for the English Longitudinal Study of Ageing found that older generations were giving millions away each year to various children’s savings schemes.

The report, Grandparental Generosity: Financial Transfers from Grandparents to Grandchildren, found that a further 2.5m grandparents in England gave £334m to grandchildren outside of CTFs during 2010.

Breaking down the data, the report found that grandparents who give a lot are more likely to be homeowners than renters and more likely to have lower or no mortgage debt.

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Brian Beach, research fellow at ILC-UK, said: “For grandchildren, these transfers are 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 effect on the social mobility of grandchildren.”

Ged Hosty, managing director of equity release at Partnership, said: “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.”

Adviser view

Dean Mirfin, group director at Preston-based IFA Key Retirement Solutions, said: “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 wellbeing of the rest of their families.”