The bank that likes to say ‘yes’
Forget the Lamborghini – 2.4 million UK Grandparents  have either raided their pension to support their grandchildren or plan to in the future. According to research from LV=, a quarter of generous grandparents who have already given away money to their grandchildren  have taken the funds from their pension. A further one in six (16%) plan to use their pension for this reason once they reach retirement age.
Open-handed grandparents are willing to give away substantial amounts to their grandchildren, whether from their pensions, savings or wages, with the average grandparent having already spent £1,633. More than one in 20 (6%) have given gifts of more than £10,000.
The generosity shows no sign of stopping, with many grandparents (56%) planning to give away even more money in the future. The average grandparent expects to give away £2,938 in the coming years, with charitable grandmas expecting to give away £173 more than grandads on average.
Pension savings are used to help with a wide range of things, from helping grandchildren get on the housing ladder (21%) and other high tickets items like university fees (20%) or cars (17%). A similar number would help out with more day-to-day expenses such as bills (21%) and hobbies (19%).
Grandparents often view financial gifts they make as a ‘living inheritance’, with more than a third (37%) wanting to be around to see their grandchildren enjoy the money .
It’s heart-warming to see grandparents so willing to help out their grandchildren both day-to-day and with large purchases. With one in five using their pension to help out, it’s important that these kind of individuals plan for their retirement and have enough money left for themselves, as even smaller outgoings like bills can become harder to meet later in life.
The generosity of grandparents in Britain is clear to see, and it is great that so many feel comfortable enough to be able to help out their family and plan to continue doing so. However, the average retirement age is now much longer than for past generations, and people’s lifestyle and associated costs are likely to change over this period.
Remaining Generous; But Also Adapting to Your Changing Needs
The flow of financial support across the generations is a striking feature of the modern family. If you find yourself in this position and are approaching retirement, it’s important to structure your income in a way that offers you enough financial flexibility to enable you to remain generous, but also to adapt to your changing needs. To look at the options available, please contact us.