New research from Saga explores whether the Bank of Grandma and Grandad is a real phenomenon. Saga surveyed 1,000 grandparents aged 65 and above, as well as 1,005 grandchildren aged 18-40, to understand how the UK feels about this type of inter-generational lending.
The Bank of Grandma and Grandad
The Saga research discovered that 29% of grandparents say they’ve lent or gifted money to their grandchildren, and this is a trend that only increases with age.
The percentage of grandparents who have lent or gifted money to their grandchildren
| GRANDPARENTS AGE | % |
| 65 – 74 | 27% |
| 75 – 84 | 35% |
| 85+ | 64% |
The grandchildren poll confirmed that grandparents are among the top three sources they’d most likely turn to first for financial support – parents were unsurprisingly top at 45%, followed by the bank (22%) and grandparents (15%). With the spiralling cost of living crisis hitting many of us hard in the pockets, grandparents could very likely surpass banks in that list with many grandparents wishing to make a difference to their loved ones’ lives.
Cash Values
According to the Saga survey, the mean total amount lent or gifted to grandchildren by their grandparents is £2,119.10. Overall, the results were mixed – a quarter (25%) of grandparents have lent or gifted more than £1,000 to their grandchildren, while a fifth (20%) say they’ve lent or gifted £100 to £199. But of course, no two families are the same, especially financially and when there are multiple grandchildren to consider: 34% of grandparents have lent or gifted to one grandchild while 38% have lent or gifted to two grandchildren, but just 9% of grandparents have lent or gifted to three grandchildren.
Open Banking – and financial conversations
The Saga research suggests grandparents and grandchildren are increasingly open when it comes to discussing financial support. Far from any ‘awkward factor’ coming into play, 68% of grandchildren told us that it was their grandparents who initiated conversations about gifting or lending money.
According to the grandchildren Saga polled, they’re also more likely to approach conversations about money with grandma than grandad. 30% of the grandmas polled said their grandchild approached the conversation – whereas just 19% of grandads reported the same.
How comfortable was your initial conversation about lending?
| GRANDPARENTS | GRANDCHILDREN | |
| COMFORTABLE | 88% | 69% |
| NEUTRAL | 10% | 17% |
| UNCOMFORTABLE | 2% | 13% |
Open Cash Injections or Strings Attached?
When Saga asked the grandparents if they should get any say in how their grandchildren spend their funds, the results were interesting with 48% having no preference for how the money is spent. Grandparents also saw the value in property (20%) and a good education (18%). Of course, context is key here with 78% of grandparents who give money as a loan to be paid back saying they want to know what the money will be used for. In contrast, just 40% of those awarding an early inheritance say the same, and for those passing on gifts, 56% say they don’t mind how the money is spent.
If you were to lend the money, do you have a preference on how grandchildren should spend it?
| EXPENSE | % |
| No preference | 48% |
| Buying property | 20% |
| Education fees | 18% |
| Holiday Funds | 3% |
| Home Renovation & Improvement | 3% |
| Other | 3% |
| Cars | 2.5% |
| Healthcare costs | 2% |
| Childcare costs | 1.5% |
Beaches and Planes Over Automobiles
The grandchildren polled by Saga revealed a slight preference for holidays (20%) over buying cars (18%) as holiday funds topped the list for how they’d spend the money given by their grandparents. Property was also a key concern for grandchildren with 17% seeking to get their first property, a further 10% wishing to move up the property ladder and 17% of grandchildren wishing to use the money on home improvement.
How grandchildren spend cash given to them by their grandparents
| EXPENSE | % |
| Holiday Funds | 20% |
| Cars | 18% |
| Buying first property | 17% |
| Home Renovation & Improvement | 17% |
| Education Fees | 16% |
| Healthcare costs | 10% |
| Moving up the property ladder | 10% |
| Childcare costs | 9% |
| Other | 8% |
Treasure Map:
Saga’s research suggests that attitudes towards lending to grandchildren differ across the UK, and asked grandparents whether they would expect a loan to their grandchildren to be repaid. The South-West of England is notably keen on getting their money back, with 48% of Plymouth and 37% of London grandparents expecting their loans to be repaid in some capacity, and in Bristol a majority (52%) said they’d want all their money back. While in Belfast and Edinburgh, 83% and 74% respectively said they wouldn’t expect to be repaid.
If you were to lend money to your grandchildren, would you expect them to pay you back?
| % GRANDPARENTS WHO ANSWERED ‘YES, IN PART’ OR ‘YES, IN FULL’ | |
| LOCATION | % |
| Plymouth | 48% |
| Brighton | 40% |
| Cardiff | 40% |
| Newcastle | 38% |
| Norwich | 38% |
| London | 37% |
| Sheffield | 37% |
| Liverpool | 35% |
| Birmingham | 30% |
| Edinburgh | 26% |
| Belfast | 17% |
The Generous Generation:
The Saga survey shed light on a remarkably generous group of grandparents, as of those polled,88% of grandparents who’ve lent or gifted money said they would do so again. 45% said ‘yes’ when asked if they prefer to spend or give money to their grandchildren over themselves, while just 17% said ‘no’. The survey also revealed that when given the chance, what do grandparents do to treat themselves to the finer things in life? Holidays topped the list at 48%. It came as no surprise that number 2 in the list was gifting, as 31% use their extra money as gifts for special occasions.
What, if anything, do grandparents spend their spare money on. Here are the top five results:
| TREAT | % |
| Holidays for myself/and my partner | 48% |
| Gifts for special occasions | 31% |
| Home renovations and improvement | 27% |
| Going out to eat | 24% |
| Holidays for my family (including children or grandchildren | 24% |
A Saga Representative stated: “We’ve long known about the Bank of Mum and Dad but as people live longer and economic times change, here at Saga, we wanted to investigate if the Bank of Grandma and Grandad was now open for business. Our research reveals that grandparents around the country consistently contribute to their families financially, but surprisingly many have no preference on how their grandchildren spend the money.
“Supporting loved ones in times of need is a priority for many grandparents as a majority who have lent, or gifted money previously are happy to do so again. Life is made for living, and while many grandparents prefer to spend spare money on their grandchildren rather than on themselves, it is positive to see that grandparents do also prioritise themselves, choosing holidays, gifts, and home renovations as their preferred ways to spend spare money.”
