Grandparents are supporting their children and grandchildren financially and through free childcare to help them cope with the high cost of living, Paragon Bank research has found.

A survey of 2,700 over 55s found that 58% of those with children have supported them financially over the past six months, with over half (53%) of those with grandchildren supporting them with cash payments.

The research also showed that an army of unpaid retirees is helping family with free childcare and other jobs - nearly one in five (17%) people aged between 65 and 74 support family with childcare.

Providing financial support

The most common reason given for financially supporting a child or grandchild was to supplement their income (40%), followed by a contribution to a major purchase, such as a car, house renovation or wedding (26%). Just over one in 10 (13%) have contributed towards a house deposit, whilst 10% have paid towards a holiday.

With regards to funding the support, 66% use their savings, with just under half (49%) using their pension income. Other sources included salary (8%), dividend income (6%) or cashing in an investment (3%).

Of those who have supported family members, four in five (81%) don’t expect to receive the money back, 9% expect partial repayment and 7% want full repayment.

Supporting childcare

Of those that help their children with childcare, 28% look after their grandchildren during the day several times a week, with over half (52%) doing the school drop off and pick up at least once a week. Meanwhile, four in 10 have their grandchildren either before or after school to help their parents.

Nearly two-thirds (64%) of grandparents look after their grandchildren to enable their parents to work, with 23% doing so because of the high cost of childcare. Over half (55%) do it because they enjoy looking after their grandchildren, with 23% doing so to help their parents cope.

An overwhelming 99% of those who support family with childcare don’t receive any financial benefit for doing so.

Additionally, those over 55 also support family across other areas of daily life, including DIY (18%), shopping (14%), gardening (13%) and housework (7%).

Derek Sprawling, Paragon Bank Savings Director, said: “The bank of grandma and grandpa is becoming more prevalent as the budgets of the working population come under more pressure. Our survey showed this group is helping their children and grandchildren financially and through more practical help; mainly through childcare but also other areas such as DIY, gardening and housework.”

Derek added: “With people using their savings to support family members, it’s important that they are making their money work as hard as possible for them. Whilst carrying out this work to support their families, and the economy thereafter, grandparents should investigate Special Adult Childcare Credits.  And, as ever, ensure they are getting a good rate of interest on their savings is imperative, but also maximising returns by using a mix of easy access and term accounts is key.” 

For further information contact:

Michael Clarke
Head of Media Relations
Paragon Bank
07740090746

www.paragonbank.co.uk 

Notes to editors:

Paragon surveyed 2,700 savings customers in March 2023.

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £14 billion of assets under management, helping more than 340,000 customers to achieve their ambitions.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551.