Parents are turning to grandparents to help support their children’s financial futures, a new survey from the Association of Investment Companies has revealed.
A survey of 4,000 UK adults found that more than three quarters (76%) of UK parents are keen to step up support for their children’s financial futures, with 60% currently feeling anxious about their children’s financial futures. Almost half (48%) believe their own parents could be doing more to help.
Expectations for grandparents to help is highest amongst younger parents, with 60% of Generation Z and 55% of millennials parents stating they would like grandparents to provide more support. The survey found that better off parents also expect more help, with 54% of those with white collar jobs thinking their parents could do more to help, compared to 34% in blue-collar professions.
However, a number of grandparents show a desire to help financially, the AIC said. A fifth (20%) say they are likely to help with a major purchase such as a car, while 17% would be likely to help with a house deposit and 15% said they would contribute towards a wedding. In contrast, only 12% of grandparents say they would be averse to doing more to support their grandchildren’s financial futures.
The AIC said investing for grandchildren could be transformational, with its analysis showing that if a grandparent had invested £1,000 into the average investment trust 20 years ago, it would be worth £8,608 today. Yet, most grandparents (62%) prefer to hold their money in savings accounts and cash ISAs (39%), with just 13% holding stocks and shares ISAs.
Annabel Brodie Smith, communications director of the Association of Investment Companies, said: “Millions of grandparents across the UK would like to do more to support their grandchildren’s financial futures.
“The Bank of Gran and Grandad could make an even bigger difference if grandparents tapped into the potential of the stock market to grow money over time. For example, an investment in the average investment trust 20 years ago would have grown more than eightfold by now. Stock market investing does involve risk but over long periods it can turbocharge your savings, so the earlier you start, the better.”
