We have all heard of the Bank of Mum and Dad, but research has recently shown that more and more grandparents are supporting the next generation – at an average cost of £900 per year!
Whilst many grandparents enjoy looking after those they love, whether it is supporting their grandchild’s hobby, helping out with driving lessons or even supporting them through university, it’s important that they don’t overstretch themselves. This research shows that over half have dipped into their savings and 14% have used credit cards to fund their gifts. In addition, many have reduced contributions to their own pension pot.
The needs and wants of grandchildren may seem more pressing than long-term plans, but it’s still important to assess whether these gifts are affordable. Sacrificing your pension not only puts you at risk in the long-term, but could put pressure on your family later on when you may need their financial support.
I know my parents love treating my children so I’m not suggesting that these gifts should stop, it’s just important to consider them in the context of your wider finances first.
Parents and grandparents across the UK spent £900 supporting grown-up children and grandchildren last year, according to new research.