Published On: Wed, Aug 23rd, 2017

Grandparents gift grandchildren over £37billion for holidays, education and first homes

One in three grandparents has given their grandchildren a financial helping hand, gifting on average £9,360 to each child.

A further third are considering giving a financial gift in the future, while others prefer to lend the money instead, according to new research from Saga.

Many say they view the gift as an early inheritance and would rather see their relatives enjoy the money, helping them cover education costs, holidays, driving lessons or even a deposit on a first property.

However, many grandparents do not specify what the money should be spent on.

Alex Edmans, head of product at Saga Money, said that most of the gifts are made out of cash savings: “Whatever amount of interest that grandparents are missing out on is outweighed by the joy they get from seeing their grandchildren benefiting from the money.”

If you are giving a loan, you should be upfront about any conditions of repayment, he said: “This will help avoid difficult conversations later.”

Grandparents should make sure they have enough money to fund their retirement and future care needs, before assisting younger family members.

Be warned, though, your local authority might regard larger gifts as “deliberate deprivation of assets” in a bid to qualify for funding towards means-tested care services.

Edmans added: “Make sure you do not fall foul of the regulations.”

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