Grandparents are saving over £1000 a year for their grandchildren, according to new research from Cheltenham & Gloucester Savings.
With the average yearly saving at £1,094 and 27% of grandparents starting to contribute as soon as their grandchild is born, many grandchildren could be receiving nest eggs of up to £20,000 when they reach 18 years of age.
The research reveals that one third of grandparents decide to put something aside for their grandchildren. Over half of these grandparents do so to help with large costs their grandchildren may encounter, such as university fees or buying a property. However only 19% would leave the decision of what to spend the money on up to their grandchildren.
‘Silver savers’ also contribute in order to ensure they are a part of their grandchild’s life after they have gone. Just under half (47%) list this as a key motive for saving.
“It is very encouraging to see grandparents saving for their grandchildren. This not only provides a good nest egg for many children as they embark upon their adult life, but also demonstrates to the children the benefits of established savings habits,” said Emma Hunter, head of savings products at C&G.
However, although a third of grandparents are saving, that still leaves 67% who are not. When asked the reason for this, 54% felt they did not have the financial means, whilst others believed that they contributed to the family in other ways.