Never mind the bank of mum and dad: Grandparents now paying £647million a year to subsidise needy grandchildren

Forget the ‘Bank of Mum and Dad’ – grandparents are subsidising their grandchildren to the tune of more than half a billion pounds a year, according to a new study.

Researchers found a fifth of grandparents in England aged 50 or over give money to their grandchildren, and the figure totalled £647 million in 2010.

Grandparents who give are more likely to be homeowners than renters and more likely to have lower or no mortgage debt, according to the research.

The study by the International Longevity Centre-UK (ILC-UK), supported by Key Retirement Solutions and Partnership, highlights how grandparents are playing a vital role in supporting future generations.

The report – Grandparental Generosity – looks at the levels and patterns of financial support from grandparents using the 2010 English Longitudinal Study on Ageing (ELSA).

Just under 2.5 million grandparents in England aged 50 or older gave money to their grandchildren.

Contributions to Child Trust Funds (CTFs), tax-free savings accounts for children available from 2005-2010, were made by one in 25 grandparents (3.99 per cent).

Millions of grandparents to fund grandchildren’s university education

Millions of grandparents expect to have to help fund their grandchildren through university as students continue to struggle with high tuition fees

More than 360,000 grandparents have already helped out with funding their grandchildren through university but this figure is expected to rise as more students struggle to cope with the cost of university tuition fees, researchers found.

Around one in eight over 55s think they will need to contribute to fees of around £9,000 a year, with many dipping into their savings to help out their grandchildren when they go onto higher education.

Experts warned that with extra pressures on finances for the under 55s, grandparents need to plan if they want to help their grandchildren.

Researchers found as people got older more expected to make a contribution, 10 per cent of those aged between 55 and 64 planning to help with funding, which increased to 15 per cent for the over 65s.

Around 637,456 students applied to university in 2013, compared with 618,247 in 2012, which suggests people could be using their families to help them pay fees.

Revealed: 50% of British parents would not send their kids to private school – even if they didn’t have to pay fees

Half the nation’s parents still would not send their children to a private school even if they did not have to pay for it, according to a survey published today.

The survey of 2,210 parents, carried out by YouGov, revealed 50 per cent would still want their child to go to a state school.

Three out of five who wanted to remain with the state sector wanted to do so because they thought it was important for their child to mix with other pupils from all walks of life. In the case of 38 per cent, it was because they themselves had been happy to go to one. A total of 37 per cent said they felt it was the duty of the Government to provide good quality education for all the nation’s children.

A breakdown of the figures showed that parents in Scotland and Wales were most likely to remain with the state sector – 62 per cent in both cases.

Least likely to send their children to state schools were parents in London – where just 35 per cent were prepared to stay with state schools despite the fact that the area recorded the biggest improvement in state school performance in the entire country.

The survey asked parents whether they would be likely to send their children to private schools if fees were removed from the equation – and 32 per cent said they would compared to just under 10 per cent who actually d so despite an average cost estimated at £15,000 a year.

Of those who would send their children to private schools if money was no object. 81 per cent said they felt private schools offered the opportunity of a better education, 54 per cent said they had better teachers and 52 per cent said they offered their pupils better networking opportunities later on in life – the “old boys’ network”. In addition, 17 per cent said they would opt for the private sector because they thought there was less chance of their child being bullied at school.

Of those who do send their children to private schools, 24 per cent said they were able to afford it because their child had been offered a bursary or a scholarship.  Private schools have increased the amount of aid they offer less well-off parents in the wake of the demise of the former Conservative Government’s assisted places scheme under Labour.

A further 24 per cent acknowledged they could only afford the fees as a result of grandparents chipping in with the cost. The £15,000 average fee for private schools cited by the parents in the survey included a sum for extra-curricular activities (school trips) and uniforms. In addition, 17 per cent said they had been saving for years to meet the cost and 10 per cent said they had cashed in part of their pension schemes to help pay.

Richard Boyd, of  Duncan Lawrie private bank – which funded the survey, said: “The average price of sending a child to private school has seen a real term rise of almost 65 per cent since the early 90’s and – while many children might be lucky enough to benefit from scholarships and bursaries – there are still many parents having to pay significant amounts of money to keep their child in private school.”

The survey showed 46 per cent of those with children in private schools would be prepared to cut down on holidays to keep their children in the school and 21 per cent would downsize their home.

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