Forget the bank of mum and dad, it would appear that its now the bank of Grandma and Grandad that offers support to the cash strapped generation of today.
Almost six million pensioners now offer financial support to their relatives, equating to a staggering £21.4 Billion of cash handouts a year.
A new report released by thortful.com has discovered the true cost of a child in the UK, whilst revealing the financial impact grandchildren will have on their grandparents.
47% of Grandparents now offer support for first-time buyers
The study of 1000 respondents revealed 47% of grandparents are now helping fund their grandchildren’s house deposits.
With one in three UK millennials predicted to never own a home getting on the property ladder has never been as difficult.
Recent products such as the 100% mortgage by Halifax have been introduced to help young people afford their own home whilst encouraging gifted deposit schemes.
Usually a gifted deposit scheme will require the following proof of information in order to allow an applicant to successfully claim:
· Relationship to the applicant
· The amount of money gifted
· Acknowledgment that the gift is non-refundable
With 47% of grandparents now supporting their grandchildren through schemes such as this, it would appear that banks maybe targeting grandparents rather than the parent of the applicant for a gifted deposit.
52% of grandparents now help fund educational fees for their grandchildren
With the average annual cost of university equating to £9,188 students are finding themselves in more debt than ever before.
11% of homeowners over-55 are accessing property wealth to help their grandchildren through university, with 52% of grandparents stating that they will help out covering the costs of education.
Further to this, the report by thortful revealed that 58% of grandparents are creating savings accounts for their grandchildren to cover life events such as university with the average saving equating to £388 per year, per child.
This means that by the time the grandchild reaches university age their savings will be on average £6984, which is substantially less than one years’ worth of fees, forcing grandparents to dig deeper into their pension fund to ensure their grandchild gets the education they desire.
The report conducted by thortful also revealed that 59% of grandparents are helping out with the cost of their grandchildren’s wedding, gifting on average £1,284, whilst 57% of grandparents stated that will also help out with the financial cost of their grandchild’s first car.
The full information on the report can be seen at https://www.thortful.com/the-true-cost-of-a-baby
"11 of homeowners over-55 are accessing property wealth to help their grandchildren"
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