M&S Money reveals that grandparents spend over £6000 on grandchildren
M&S Money has revealed that as parents begin to feel the pinch of Government cuts, new research shows that grandparents in the UK are providing more than £6000 of support to grandchildren. Over the first 18 years of each grandchild’s life, grandparents gift on average £6165 in either money or presents.
Children born after 1st January 2011 will no longer receive a £250 Child Trust Fund voucher from the Government, and some families will also be hit by the plans to cut higher rate taxpayers’ child benefit from April 2012. But despite these losses to household income, M&S Money research reveals that grandparents actually contribute more than the outgoing Child Trust Fund voucher, spending around £315 on each grandchild in their first year. Each year, they also spend an average of £257 on additional items and £68 on birthday and Christmas presents.
More than one in five grandparents (22%) spends over £50 on Christmas presents for each grandchild and 11% spend more than £50 on each birthday gift.
Despite the recent squeeze on pensioner income, one in five (20%) grandparents say they actually spend more on their grandchildren than they did on their own children.
When it comes to financial gifts, 28% of grandparents said they give their grandchildren savings for use when they are older. A further one in ten (10%) gives their grandchild regular pocket money. Older grandparents are also more likely to give money than an actual gift. Over half (58%) of 71-75 year olds said they preferred giving money so their grandchild could buy what he or she wanted compared to only 22% of 50-55 year olds.
Colin Kersley, chief executive of M&S Money, said: "With planned benefit cuts likely to affect families across the UK, it is reassuring to see additional support being provided by doting grandparents. Whether this is in the form of gifts or money, grandparents are proving a significant boost to family finances.
“Although giving an actual present is more popular than giving money, grandparents may want to consider what is likely to be most valuable over the long term. Recent research by M&S Money showed that the average cost of training for one of the top ten most popular careers is an eye-watering £24,686 for boys or £31,049 for girls. Therefore money put into savings when a grandchild is born and then topped up over the course of their childhood would provide a welcome nest egg as they reach adulthood.”
Unsurprisingly, grandparents with fewer grandchildren are able to be more generous when it comes to both Christmas and birthday gifts. Those with only one grandchild spend £38 on average on birthday gifts whereas those with 4 or 5 grandchildren spend £29 per grandchild. At Christmas, those with only one grandchild spend £11 more per grandchild than those with 5 grandchildren (£48 compared to £37).
About M&S Money:
M&S Money (the trading name of Marks & Spencer Financial Services) was founded in 1985 as the financial services division of Marks and Spencer Group plc, making 2010 the company’s 25th anniversary.
The company is a top-ten personal credit card provider and the second-largest currency exchange retailer in the UK. M&S Money also offers a range of insurance cover, including home insurance and insurance for cars, as well as loans, savings and investment products.
Notes to Editors:
Opinion Matters Research among 1,152 50-80 year olds was undertaken between 18th and 30th November 2010.
All training costs are actual fees and cost of accommodation rather than the cost of living while studying. Average University degree costs have been used.
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