Tel: 01283 701569

Experienced Independent Financial Advisers

Supporting younger generations

30 Oct 2020

Giving grandchildren financial security is an important goal for many

If you are a grandparent, it’s natural to want to help out the family. And if you’re able to give a financial boost – whether it’s a loan or a gift – to the younger generation, it can be enormously rewarding for you too.

Even during the current coronavirus (COVID-19) crisis, some grandparents may be enjoying generous final-salary pensions and are also benefiting from the property boom of recent decades, enabling them to help their grandchildren with student debts, funding education or getting them on the housing ladder. However, this is certainly not the case for everybody.

Long-term cash flow
If you’re a grandparent, it is important to secure your own lifestyle first, and only then gift what is possible. Understanding your long-term cash flow – for example, tracking income and outgoings and looking at how existing assets can support you – is key to putting a plan in place.

This will provide you with the clarity you need for your own situation and ultimately help you to make decisions about providing sustainable financial support to the younger generations as well. Much of the focus around the financial fall-out from COVID-19 has been on the recent volatility and concerns about the value of pension pots, but the pandemic has impacted all generations.

Financial support
Being a grandparent is a unique and special role in a child’s life, and research shows that nearly half (48%) of grandparents have stepped in to financially support their grandchildren during the COVID-19 outbreak, despite being concerned about their own retirement income[1].

Giving your grandchild financial security is an important goal for many grandparents. There are ways to save and invest for grandchildren that can have a more lasting effect on their financial independence beyond cash in a Christmas and birthday card each year. Lots of options exist that are tax efficient for them – and you too.

Rent and mortgage payments
A third (32%) of grandparents have given cash to their children, 8% have provided childcare, and 6% have helped with rent and mortgage payments. However, a quarter of grandparents haven’t been able to see their grandchildren during the lockdown periods – not even remotely.

20% of those questioned said they were worried about the value of their private pension, and a further 13% were also worried about the stability, as well as the value, of their workplace pension.

Entrepreneurial streak
Many grandparents have also shown an entrepreneurial streak to protect their retirement funds, with 45% taking action to generate income as a result of the pandemic. This includes selling items on eBay (23%) and looking for part-time work (10%).

The research shows that grandparents want to provide for their families, even if this makes them worry about their own financial future. However, it shouldn’t be the case that they are choosing their family’s financial stability over their own.

Source data:
[1] Killik & Co 21 July 2020

Footnote: Our belief is that all finacial advice should be tailored to your particular needs and situation. The content of the articles featured in here are for your general information and use only; they are not intended to address your particular requirements or constitute a full and authoritative statement of the law. They should not be relied upon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. Please get in touch to meet with us for a full consultation.

Get in touch for more details

Please fill the form below to contact us

    Your Name (required)

    Company Name

    Your Email (required)

    Areas of concern

    Individual servicesCorporate servicesMiscellaneous


    Your Message

    We take your Privacy Seriously. Personal information submitted to us with this form will be treated in accordance with the Data Protection Act 2018 and General Data Protection Regulations ‘GDPR’. By submitting this enquiry form you expressly consent to be contacted without prior notice or arrangement by using the contact details you have provided on the form. For further information on how we treat your personal information, please view our Privacy Policy

    I have read and agree to the privacy policy. Please retain my details to contact me.Please do not add me to the mailing list.