Bank of grandad financing today’s younger generation
The Bank of Grandad and Grandma is providing vital financial help to over a quarter of Britain’s youngsters and young adults with help on school and university fees and deposits on that first home topping the list.
But, with a little bit of planning, that can help not just the grandchildren, but maybe even the grandchildrens’ grandchildren. Founding a Family Bank is easy, and well within the means of most home owners.
However, a recent survey has demonstrated that almost a quarter of grandparents use their savings or – far more dangerously – credit cards, overdrafts or even at the extreme end payday loans to help their grandchildren, according to says Money Supermarket. Additionally, around one third of parents with kids over 18 also said they are still being relied on by their offspring for financial help. Not exactly “news” if you are a parent, or look at the statistics for those going to university!
The Family Bank(c) – the Real Bank of Grandad and Grandma.
All of this can be eased in time, but the first generation to create a Family Bank Trust will be doing a great service to future generations, and perhaps their children will add to the power of The Family Bank by creating their own branches, just as wealthy families have always done.
The grandparents taking part in the study confirmed that the so called ‘greyday loans’ are being used to help ease a squeeze on their living costs and keep younger family members solvent in tough economic times.
Very nearly half of parents and grandparents helping out said this had had a significant and often serious affect on their own savings and financial security. Fourteen per cent had been forced to use credit cards to fund younger generations and about the same number have had to draw on their overdrafts said the Money Supermarket research.
The result has been that one in three felt ‘greyday loans’ have left them shorter financially than they felt comfortable with less of a financial cushion than they would have wished. Nearly one in five had debts themselves which they could not 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 Money Supermarket.
“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.”
So please do investigate setting up a Family Bank – the earlier it is done, the greater the benefits are likely to be for future generations. And you don’t need to be a grandfather or grandmother to set one up.