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Older people sacrificing finances to give to grandchildren

9th October 2015

This news article is from Handicare UK. Articles that appear on this website are for information purposes only.

New research suggests that grandparents and parents with adult children are gifting too much money to younger family members. This could have a significant effect on their standard of living, as many are having to cut back on food shopping, travel and hobbies in order to fund this, according to Investec Wealth & Investment.

One in five admitted in a survey that they felt they were being ‘overgenerous’, with half of this number cutting back on travel, 42 per cent on eating out, and 39 per cent on home improvements as they no longer have the funds to cover such things as the cost of a stairlift.

The survey also revealed that grandparents and parents in London and the South East are likely to be the most generous, while those in Wales gift the lowest sums of money.

Grandparents risk compromising standard of living

Of those who plan to or currently give to grandchildren, the average amount of money spent each year is £5,026, which could quite easily be used to fund things such as holidays or investment purchases. It seems that many grandparents are willing to sacrifice luxuries such as these, in order to provide for their younger relatives.

Chris Aitken, of Investec Wealth & Investment, told This Is Money: “Generosity has its limits and we would strongly advise people to stick to what they can afford without it affecting their own quality of life. This means planning to have enough capital to enjoy a long and active retirement, not forgetting that they may need to factor in the cost of long term care.”

It would also seem that it’s not just money that grandparents invest in their grandchildren, with a previous study finding that more than two-thirds spent a considerable amount of time looking after their grandchildren in the summer holidays. It was speculated that if grandparents were given a wage while carrying out these duties, they would earn over £20,000, according to HSL.

Image Credit: hugabub (flickr.com)