‘Bank of granddad’ financing today’s younger generation
As many as 25% of Britain’s grandparents are providing much-needed financial help to their adult grandchildren, assisting their survival in the harshest economic environment for generations.
A new study shows that some 24% of grandparents are plundering their savings or using credit cards, overdrafts or even payday loans to help financially protect their grandchildren, according to MoneySupermarket.com. In addition, 32% of parents with children aged over 18 also said they are still being relied on by their offspring for financial help.
According to those grandparents surveyed, so called ‘greyday loans’ are being used by the younger generation to help ease a squeeze on their living costs and keep them solvent during spiralling unemployment. Funding education and helping with debts were also among the reasons detailed by elderly respondents.
More than 46% of parents and grandparents who are helping out financially said this has eaten into their own savings, while 14% have used credit cards and a further 14% have dug into their overdrafts, MoneySupermarket.com added.
As a result, a third said the ‘greyday loans’ have left them unable to save as much as they had wanted for themselves and 18% have outstanding debts which they cannot pay off.
“Parents and grandparents have always traditionally provided financial support towards their children’s life goals such as buying their first home or helping with a car purchase, but with the nation’s wallets pushed to the limits, it is clear this support has grown significantly,” said Kevin Mountford, Head of Banking at MoneySupermarket.com.
“The research also demonstrates how many families are struggling with even just the basic general cost of living and coupled with a lack of pay increases means many are unable to clear their debts.”