Students look to the Bank of Gran and Grandad for financial support
Forget the Bank of Mum and Dad. Now it’s the Bank of Gran and Grandad helping to support family members, according to Key.
The equity release adviser said that grandparents are increasingly helping their grandchildren manage the costs of being a student, with one in three having helped or planning to help them with university expenses.
Around 15% of grandparents say they have already contributed and another 20% are planning to help over the next 10 years, Key’s research found.
How do they pay for it?
Most grandparents are using their cash savings to support students but a growing number, around 11%, are considering accessing property wealth by downsizing, selling other properties, remortgaging and equity release.
Most students will not need to repay the Bank of Gran and Grandad, with nearly four out of five (79%) grandparents regarding the cash as a gift, and 18% only wanting some of their money back. Just 3% expect all their money back.
Will Hale, CEO at Key, said: “The over-55s are a generous generation with many looking to help their loved ones, especially when it comes to something as important as education. The cost of higher education can seem daunting with students leaving university with average debts of £50,000 as well as their degrees.
“Retired homeowners are mainly using savings to help fund university fees but are also turning to their property wealth using alternatives such as equity release to support families.
“When making any significant financial decisions good specialist advice is key to ensuring older homeowners use their property wealth in the best way to support their own needs and aspirations and those of their families.”