Forget the bank of mum and dad, it seems first time buyers are looking to the ‘Bank of Gran and Grandad’ in order to get on the property ladder.
Research by Saga shows that grandparents have given more than £37bn to their grandchildren, with one in 10 saying the money was used for the deposit on a house.
A further third of grandparents are still considering or intending to give a financial gift and a tenth are thinking about lending money to their grandkids.
The average donation from grandparents is £9,365, with those in London and the south east giving the most.
Grandparents in Yorkshire are among the most likely to give a financial gift.
More than half of those surveyed said they see the gift as an early inheritance and would rather see their relative enjoy the money.
Four in 10 are also happy for their grandchildren to spend the gift on anything they like.
Nearly a quarter (23%) of grandchildren spend their grandparents’ cash on education, 13% use it to go on holiday and 12% pay for driving lessons.
Alex Edmans, head of product at Saga Money, said: “Most of the money grandparents are gifting is coming from their cash savings, so whatever small amount of interest they are missing out on is clearly outweighed by the joy they get by seeing their grandchildren benefitting from the money.
“If you are giving your grandchildren support as a loan rather than as a gift it pays to take a few sensible steps so there is no awkwardness later on.
“Only half of grandparents say they discussed repaying the loan with their grandchild, our advice is to be upfront about the conditions of the loan including how you would like the money repaid in order to avoid difficult conversations at a later date.
“Our customers are increasingly turning to gifting money through equity release in order to help grandchildren onto the property ladder. On average they take £33,000 out of their property in order to give to family.”