The ‘bank of Mum and Dad’ is commonly relied upon by today’s millennials in order to make ends meet in one way or another. However, generous grandparents are starting to change this dynamic.
According to research from LV, 2.4 million UK grandparents have either raided their pension to support their grandchildren or plan to in the future and are increasingly being seen as the gracious benefactors of down payments on houses, cars, and repayments on university loans.
This generosity shows no sign of stopping, with 56% of grandparents planning to give away even more money in the future.
Living inheritance
Pension savings are used to help with a wide range of things, from helping grandchildren get on the housing ladder, university fees or cars to more day-to-day expenses such as bills and hobbies.
Grandparents often view the financial gifts they make as a ‘living inheritance’, with more than a third wanting to be around to see their grandchildren enjoy the money.
Retirement focus
While such generosity is certainly commendable, with one in five using their pension to help out, it is important that these grandparents plan for their retirement and have enough money left for themselves. The average retirement is now much longer than for past generations and people’s lifestyle and associated costs are likely to change over this period, therefore even smaller outgoings such as bills can become harder to meet in later life. We would urge grandparents to consider these factors before giving away large chunks of their pension funds.
If you are one of these generous grandparents and find yourself approaching retirement, it’s important to structure your income in a way that offers you enough financial flexibility to enable you to remain generous, but also adapt to your changing needs.
Expert pension planning advice
The pension specialists at George Square Financial Management can help you to plan for your retirement which could allow you to live the lifestyle you have planned as well as continue to support your family.
For a free consultation with one of our expert financial advisers, call our friendly team on 0115 947 5545 or send us a message here.