Ask a grandparents for advice on preparing for a new baby, medicine and you’ll [...]
Recession sees grandparents giving inheritance in advanceCreated by Arabela in Saving for grandchildren
The tough economy is taking its toll on the younger generations and grandparents are happy to help. However, search as revealed in a new survey, advice that money has to come from somewhere, pills and it’s likely to cost grandchildren their future inheritance.
Real Retirement Report
The results of Aviva’s Real Retirement Report show that more and more over-55s are finding themselves supporting their families with money that was meant to be left as an inheritance. This news comes despite the fact that households across Britain, including pensioner households, are struggling to make ends meet. Grandparents are finding the funds to help their families, though it will cost them in the end. Over 1 in 5 (20%) of over-55s say they have given their family members money now instead of leaving an inheritance.
The over-55s polled that have not yet retired were the least optimistic about their chances of leaving their children an inheritance, as they feel they will likely give their estate away to family members when they need it most instead of when they die.
Of course, even the generosity of grandparents has a limit. Overall, over-55s said they don’t mind giving away their children and grandchildren’s inheritance in advance, but they were understandably less likely to give up their own standards of living to support their families. Just 7 percent said they would rather help their children financially than eat at restaurants, while less than 10 percent said that they would stop home improvement plans in order to help their children.
Supporting grandchildren’s future
Grandparents who do want to leave their grandchildren an inheritance may want to consider long-term savings plans, such as the Junior ISA, which allow them to build up a nest egg for the future over the course of 18 years. These accounts, offered by providers like Shepherd’s Friendly, allow grandparents to give small, tax-free contributions regularly in order to build up a large windfall for their grandchildren. In addition, since anyone can save into these accounts, the whole family can work together to ensure the next generation’s prosperity.
With university fees hitting a sky-high £9,000 a year, grandchildren are likely to need help if they’re to get an education without acquiring a mountain of debt. Saving into a Junior ISA or University Savings Plan in advance can mean less stress on your children and grandchildren, and less pressure on grandparents themselves when the family’s hour of financial need arrives.