December 2021

Grandparents increased generosity during the pandemic

Most grandparents are familiar with the financial challenges faced by their grandchildren as they progress through education and into the world of full-time work. Costs such as university tuition fees can leave upcoming generations with substantial debts even before they enter the workplace, making it harder for them to save for a deposit on their first property purchase.

The impact of coronavirus has added a new dimension to the problem, with disrupted education and a battered economy raising uncertainties about future earnings potential. Many grandparents who have been fortunate enough to be able to help the next-generation-but-one along the rocky road to their lifetime dreams and ambitions, have been able to increase their help.

Evidence that grandchildren have often benefited financially from locked-down grandparents, unable to spend on holidays and eating out, has been provided through research conducted by Scottish Friendly Assurance Society. The financial mutual company surveyed a sample of grandparents who were already investing for their grandchildren to see what influence the pandemic had exerted.

Almost half increase their largesse

Responses showed that 47% of those grandparents had increased amounts given to their grandchildren during the previous 12 months. The main drivers were found to be a reduction in their own spending opportunities during the COVID-19 restrictions and a heightened desire to create a larger savings buffer for their grandchildren at a time of economic uncertainty.

Jill Mackay of Scottish Friendly commented, “There are grandparents who do have the discretionary income to put towards family savings and this can be a big support. It’s also encouraging to see grandparents deciding to invest more of their money rather than save it in cash.”