Children forced to rely on 'grey pound' for start in life

Children are becoming increasingly reliant on their grandparents for financial aid, with the "grey pound" helping to pay for everything from school fees to a foot on the property ladder.

Almost two-thirds of UK grandparents now make regular financial contributions to their grandchildren, from pocket money to helping them buy a first house, according to a survey.

YouGov asked 2,000 parents and grandparents in March how much they spent on their children and grandchildren over a year. The results highlight the growing power and influence of the "grey pound". As the cost of bringing up a child continues to rise, parents appear ever-more reliant on their own mothers and fathers to act as a financial buffer for their offspring.

Almost a fifth of grandparents polled said they had bought or helped to finance a first car, while one in 10 helped with school or university tuition fees. Grandparents also doled out pocket money on a par with parents, and one in three contributed to their grandchildren's savings accounts.

The research was commissioned by KidStart, a child-orientated loyalty scheme which was launched in April and allows parents and grandparents to accumulate cash savings for children by shopping at selected retailers.

"We were surprised at how much grandparents contribute financially to their grandchildren's future," said Chris Hodgson, a co-founder of the scheme. "But grandparents who have witnessed changes in the economy first hand are more likely to understand the value of money, so it shouldn't be surprising.

"There seems to have been a big change in atti-tudes to saving over the past two years – people seem more aware about having money for the future."

Josephine Dryden, 80, from Winchester, who has nine grandchildren ranging from six months old to teenagers, contributes to their long-term savings schemes with her husband.

She said: "They all have savings accounts to help them when they get to university or with other requirements, and we contribute to those.

"Their welfare is always on our minds, and we're always there to help. I speak to my friends about it, and we're all concerned about our grandchildren's future. We help where we can, because we know times are hard sometimes."

The survey is the latest in a long line of studies which point to a dramatic rise in the over-60s' financial clout. In contrast to today's parents, who are burdened with large mortgages and high living costs, grandparents hold a relatively high proportion of the country's wealth, mainly thanks to the property boom which saw their previously inexpensive houses rise steeply in value over decades.

A similar study published by HSBC last year suggested that a growing number of parents rely on "granny nannies" to look after their children, saving them an estimated £50bn a year in childcare costs. But perhaps the biggest sign of grandparents' increasingly influential role is the decision by some independent schools to hold open days geared towards them.

St Paul's in London – one of the country's top private schools – recognises the value of keeping relations with their pupils' elderly financial guardians cordial. Grandparents are invited on school tours to help them decide if the establishment is the right place to educate their grandchild.

Grandparents' Day is also an annual event at Vinehall School in Robertsbridge, East Sussex, and last year attracted more than 100 guests. Grandparents sit in on an assembly, tour the school and meet teachers.

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