The bank of mum and dad is often relied on to help fund big life events like first houses, first cars and firstborns. But, we’re increasingly relying on grandparents to help fund major milestones.
Data from personal finance experts, moneyguru.com shows that over 55s are more likely to apply for a higher value loan than any other age group, and over 75s are more likely to be accepted. Is all of this borrowing to help out their children and grandchildren?
Deborah Vickers, channel director at moneyguru.com said,
“There’s a noticeable gap between wages, house prices and the general cost of living which puts Gen Y (those born in the 80s and 90s) at a disadvantage when it comes to securing finance – something the baby boomers never had to worry about. What this means is we’re seeing financial help from mum and dad being replaced by granny and grandpa.”
A study carried out by Prudential claimed over 56 per cent of pensioners say they give money to their children, while 25 per cent support their grandchildren, with retirees reportedly spending over £4,000 a year supporting their families*. According to a 2017 report by Santander mortgages, nearly 1 in 10 first-time buyers turn to their grandma and grandpa for financial support**.
The UK’s inflation is affecting consumers’ day-to-day spending and cost of living. And with fuel and transport ticket prices recently increasing, it isn’t surprising that the older generation are lending money to younger generations in the financial firing line.
The bank of grandma and grandad may seem like an easy escape, but there’s a few easy ways to help you become more self-sufficient and fund those big events.
- Rainy-day fund
Set yourself a realistic monthly goal of how much you want to put in your rainy-day fund. This will make setting aside a little bit of cash each month manageable, and in no time, you’ll see this rack up. Turn to your savings for unexpected outgoings, such as emergency call-out fees or increase in bills, rather than relying on doting grandparents for a helping hand.
- Check your credit report
Do you know what your credit report is, and what it means to lenders? If you do, you can work out how to improve it. Your credit report can affect everything from mortgages, car insurance, to getting a job, so you need to make sure it’s as healthy as possible.
- Work out where you spend
It’s easy to splash the cash once you’ve paid for the big things like your bills, rent, and monthly shop, and you’ll soon wonder where your money’s gone. Make a budget to work out where your disposable income is going and see what you can live without. This way, you’ll find yourself scrabbling around for cash ahead of payday a lot less frequently.
- Step away from the takeaway
Research shows time-poor Brits are turning to fast food to help with their busy schedules, but cutting takeaways from your life could save you up to £80 a month***. Plan your weekly meals and ensure you have all the required ingredients at hand, making cooking dinner easier and cheaper than ever.
- Costa-lot of money
Britons spend around £2,210 a year in coffee shops^, which is eight per cent of the average UK salary. This may not seem like a huge percentage, but by giving up frequent coffee trips for a month, you could save yourself over £50^^. Make yourself a coffee at home or at work to enjoy on the go, and you won’t be as reliant on family members for extra cash.
Visit moneyguru.com’s Wisdom page for the latest financial information and top tips to help you spend and save wisely.