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).