Grandparents saving for the financial future of their grandchildren

Grandparents in the UK are saving in order to help their children and grandchildren and are contributing billions of pounds every year towards everyday family costs, according to research from JP Morgan Asset Management.

The study, which polled more than 1,000 grandparents, explored the ways they help their families financially and discovered two-fifths of them (42 per cent) are saving for their grandchildren's future. 

During the last 12 months they have put away an average of £154 each – which is £2.4 billion collectively – with a typical savings account being the most popular way to save money. Meanwhile, of those who are not saving for their grandchildren's future, more than half (55 per cent) said it is down to the fact they simply cannot afford to in the current climate. However, one in six say that parents or other family members are already taking care of this.

The daily cost of living is growing by the day, but wages are not increasing in line with it. For this reason, many grandparents are contributing financially to the day-to-day costs of raising children and it all adds up to an average of £257 each a year – more than £4 billion collectively. 

Just over a third (36 per cent) help to buy clothes and school uniforms, while 29 per cent pay for shoes and 16 per cent help cover the cost of school trips.

Childcare is also a rising cost in the UK and many parents cannot afford to pay for it when they are at work. Grandparents are also helping in this area too, with over a third (36 per cent) of those who said they look after their grandchildren for free do so for more than ten hours during an average week. 

Those who do not provide any care for their grandchildren mainly put it down to distance, with two-thirds (67 per cent) admitting they do not live close enough. 

Keith Evins, head of UK funds marketing at JP Morgan Asset Management, said: "As parents and grandparents it's important we do as much as possible to lay a good financial foundation for our families, so it's encouraging to see generations rallying round each other with support."

By Amy White