Most grandparents are familiar with the financial challenges faced by their grandchildren as they progress through education and into the world of full-time work. Costs such as university tuition fees can leave upcoming generations with substantial debts even before they enter the workplace, making it harder for them to save for a deposit on their first property purchase.
The impact of coronavirus has added a new dimension to the problem, with disrupted education and a battered economy raising uncertainties about future earnings potential. Many grandparents who have been fortunate enough to be able to help the next-generation-but-one along the rocky road to their lifetime dreams and ambitions, have been able to increase their help.
Evidence that grandchildren have often benefited financially from locked-down grandparents, unable to spend on holidays and eating out, has been provided through research conducted by Scottish Friendly Assurance Society. The financial mutual company surveyed a sample of grandparents who were already investing for their grandchildren to see what influence the pandemic had exerted.
Almost half increase their largesse
Responses showed that 47% of those grandparents had increased amounts given to their grandchildren during the previous 12 months. The main drivers were found to be a reduction in their own spending opportunities during the COVID-19 restrictions and a heightened desire to create a larger savings buffer for their grandchildren at a time of economic uncertainty.
Jill Mackay of Scottish Friendly commented, “There are grandparents who do have the discretionary income to put towards family savings and this can be a big support. It’s also encouraging to see grandparents deciding to invest more of their money rather than save it in cash.”