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Beverly Chandler

The Bank of Grandpa and Grandma

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Research from Investec Wealth & Investment finds that 19 per cent of parents rely or plan to rely on grandparents to help pay school fees, estimated to average at GBP15,675 a year. 

According to the study, on average grandparents pay a third towards the cost of their grandchildren’s education but 19 per cent of parents are fortunate enough to have the older generation pay over half the fees.  Grandparents account for the third largest source of capital for parents looking to finance school fees behind their salary, 63 per cent and savings and investments at 47 per cent.
 
The study found that grandparents keep on giving: 13 per cent of parents whose children have gone to university or plan to do so have done so with financial help from the grandparents towards fees and living costs.  As with school fees, grandparents rank third in sources of finance for university, after parents’ salaries (53 per cent) and their savings/ investments (50 per cent).
 
Chris Aitken, Head of Financial Planning at Investec Wealth & Investment says: “For many families educating kids privately is only an option if they receive a financial leg-up from the grandparents.  And it doesn’t stop there; grandparents are increasingly paying towards university and even home deposits for their grandchildren too.
 
“While many grandparents prefer to see their money being put towards helping the younger generation get on in life, they need to ensure they have enough for themselves, particularly if they end up having to pay for long term care.  Likewise, parents shouldn’t become overly reliant on their grandparents’ generosity as circumstances can quickly change.”

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