F&C website
Grandparents are fast becoming the financial backbone of the average UK family, according to a whitepaper from F&C, which examines the role of grandparents in family finances.
The research revealed that grandparents were invaluable, financially and emotionally, to the average family in the UK. F&C says that by 2020 one in three people will be grandparents and two thirds of investors in Junior Isas are grandparents
Over a third of parents in the UK rely on grandparents for childcare, with average grandparents spending 10 hours a week looking after children at £1830.40, annually (according to the Daycare Trust, 2011). Over one in 10 grandparents (13%) contribute to university fees, and almost a quarter (24%), contribute to holidays, and miscellaneous things such as laptops, driving lessons and clothing.
Some argue this 'lucky' generation has benefitted from advantageous property prices and mortgage rates, strong investment returns, and generous pension schemes, in the form of defined benefits – and therefore make up the wealthiest proportion of society.
However, F&C's research reveals that this generation were in fact a prudent generation of savers. The savings ratio in 1992 was at 12%, and over the course of 15 years this dropped to 2% (in 2007), despite rising wages over this period, demonstrating our grandparents may have a thing or two to teach us about savings.
There is evidence to show that these prudent grandparents are now putting their hard earned savings to use for future generations. For example, two thirds of contributions made to Junior ISAs last year were made by grandparents. And, as the first providers of Children's Investment Plans, F&C has found grandparents account for two thirds (66%) of investors in F&C's Children's Investment Plan saving scheme. The research has also highlighted the role grandparents play as educators to the younger generation, with 93% of grandparents passing on their financial knowledge to children by giving financial advice.
Tracy Fennell, head of marketing & communications at F&C, said: "F&C has a long and proud history of providing for families, and with ever increasing financial pressures on the average family, it is encouraging to see the number of grandparents contributing generously to the financial welfare of their grandchildren, both via savings and by providing financial guidance."
