Generous grandparents give families more than £570 a year
More than half of grandparents have handed over cash gifts to their children or grandchildren, with some even making sacrifices to claw together the money.
Over half of grandparents have handed over cash gifts to their families, averaging at £571 a year.
The research by Homewise found that the over 55s are handing over even larger sums to their family. In the past five years, 54% of over-55s have given a one-off lump sum to family members, with 14% giving more than £10,000.
Who are the biggest gift-givers?
Grandparents in the North East are the most generous – two out of three have given away money to their children or grandchildren.
At the other end of the scale, only 39% of grandparents in the South West have been handing out cash.
Here’s a breakdown of the UK’s most generous grandparents.
| Region | % of grandparents giving cash |
|
North East |
66% |
|
North West |
63% |
|
West Midlands |
58% |
|
London |
55% |
|
Northern Ireland |
55% |
|
East Midlands |
53% |
|
East |
52% |
|
Yorkshire and the Humber |
52% |
|
Wales |
51% |
|
South East |
48% |
|
Scotland |
46% |
|
South West |
39% |
|
UK |
52% |
Inheritance Tax implications
When giving away money, you need to think about the Inheritance Tax implications of the gift. If your estate is worth more than £325,000 when you die then the Inheritance Tax could be due on the excess at a rate of 40%.
You can give away up to £3,000 a year without it being counted for Inheritance Tax purposes, but if you give away more than that it will be taxed if you die within seven years of the gift.
Read more at How to cut your Inheritance Tax bill.
Grandparents feel the pinch
The research also found that some grandparents can’t really afford to part with the money they are giving away.
Of the people surveyed 35% admitted that they had been forced to make sacrifices in order to free up cash for their families. Almost two thirds had cut down on socialising while 24% stopped going on holiday.
“Our research reveals the extent to which grandparents in the UK are being relied upon for money by children and grandchildren,” says Mark Neal, managing director of Homewise.
“Helping family is important to many but it is worrying if they are suffering as a result. Far too many people in retirement are stuck in unsuitable housing and have to scrimp and save.”
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