Bank of Grandma and Grandad | Saga Equity Release

Without the Bank of Mum and Dad, many young adults find it hard to pay for life. From paying for homes to holidays, parents can offer help in lots of ways. But there’s an extra option: the Bank of Grandma and Grandad.

Many people over 50 – known as Generation Experience – work, volunteer, and offer care. But our research shows they’re giving in other ways, too. A survey of 1,000 grandparents over the age of 65 and 1,005 grandkids aged 18-40 showed:

29% of grandparents say they’ve lent or given money to their grandkids. This rises to 64% of over 85s.
Almost 48% don't mind how their grandchildren spend the money. Buying a home (20%) is the top option.
Bristol is the city where grandparents most expect a loan to be repaid. 52% said they’d want their money back.
Grandkids are more likely to spend money from grandparents on holiday funds. 20% chose this option, ahead of buying cars (18%) and a home (17%).
88% of grandparents who have lent or gifted money said they would do so again.

Hey big lenders

So, how big a trend is the Bank of Grandma and Grandad? Our research found that 29% of grandparents have lent or gifted money to their grandkids. This trend rises with age.

Percentage of grandparents who have lent or gifted money to their grandchildren graph

What’s more, our young adults said that grandparents are among the top three most likely sources they’d turn to for support. Parents were top at 45%, followed by the bank (22%) and grandparents (15%).

In an age when people are living longer, it’s perhaps no surprise that grandparents want to see their grandkids enjoy the fruits of their labour. And with the cost of living rising, many grandparents aren’t waiting to help their loved ones.

How much do grandparents give?

Our research shows the mean total amount lent or gifted by grandparents is £2,119. 25% have lent or gifted more than £1,000 to their grandkids, while 20% say they’ve lent or gifted £100 to £199.

But no two families are the same. And where there are many grandkids, the picture can differ. 34% of grandparents have lent or gifted to one grandchild. But 38% have given funds to two grandkids and just 9% to three grandkids.

Grown up conversations

Money is rarely the easiest topic of conversation. But it appears that families are more open about the subject. 68% of grandkids told us it was their grandparents who started talks about money. And comfort levels around money chats are shown in the chart below.

Grandkids are more likely to chat about money with their grandma than grandad. 30% of the grandmas said their grandchild began the chat. Just 19% of grandads reported the same.

Strings attached?

Gifting or lending money is a generous act. But should grandparents get any say in how the money is spent? It seems they most value property and education. But many are relaxed.

Icons and percentages of how Grandparents would expect their grandchildren spend a loan

How does this compare with younger people? We asked the grandkids about their money plans.

It seems grandkids prefer holidays to cars. But does this affect how grandparents think about their lending? In reality, this can depend on the context. For example, 78% of
grandparents who give a loan say they want to know what the money will be used for. In contrast, just 40% of those gifting an early inheritance say the same. For those passing on gifts, 56% say they don’t mind how the money is spent.

Mapped: Britain’s Bank of Grandma and Grandad

Attitudes towards lending to grandkids differ across the UK. We asked grandparents whether they would expect a loan to be repaid, then we split the results by region. Judging by our findings, the south-west is keen to get their money back. But 83% in Belfast and 74% in Edinburgh said they wouldn’t expect to be repaid.

Map of the UK showing areas where grandchildren would be expected to pay back a loan from their grandparents

The gift that keeps on giving

Parting with our money is a big decision. But once grandparents start gifting or lending, it’s a habit for life. 88% who’ve lent or gifted money said they would do so again.

Our survey also shed light on the levels of generosity. 45% of grandparents said they would prefer to give money than keep it. But even the most loving ones deserve the finer things in life – and here are the top things the spend their money on.

Holidays for me and my partner - 48%
Gifts for special life events - 31%
Home upgrades - 27%
Eating out - 24%
Holidays for my family - 24%

Unlock cash from your home and share the benefits with your loved ones

Life is made for living, and if you’re looking to free up some cash to spend in your later years, or to help family members, why not consider Saga Equity Release provided by HUB Financial Solutions Limited? If you're a UK homeowner aged 55 you could release tax-free cash and spend it on what you like – from home upgrades to gifting money to your loved ones.

A lifetime mortgage is a loan secured against your home. Taking out equity release will reduce the value of your estate and can affect your eligibility for means-tested state benefits. Gifted money may be subject to inheritance tax

Methodology

Saga surveyed 1,000 grandparents aged 65+ and 1,005 grandchildren aged 18-40 in December 2022 to reveal the habits and attitudes towards gifting from the Bank of Grandma and Grandad.