A third of grandparents have given a financial boost to their grandchildren, donating a total of £37bn, according to Saga.

And one in 10 said this money was used as a deposit for a home.

The typical donation from grandparents is £9,365, with those in London and the South East giving the largest deposits, although grandparents in Yorkshire are some of the most likely to gift to their grandchildren.

A further third of grandparents are planning to give a financial gift to grandchildren.

Early inheritance 

Grandparents say that they view the gifts as an early inheritance, with over half saying that they would rather see their relative enjoy the money than wait to leave it as an inheritance.

Many don’t specify what the money should be spent on, although Saga found it mainly went on education, (23%), holidays (13%), driving lessons (12%) and house deposits (9%).

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.

“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.”