Grandparents Provide Vital Financial Support
Families across the country are relying on handouts from retired Grandparents, new research reveals.
Retired homeowners are using around 23 percent of the money they raised from selling their house to help out family in the past year, Key Retirement Solutions showed.
The average payout stands at £23,328, with one payout reaching £262,000, and gifts start at an average of £2,000.
“The Bank of Gran and Granddad is definitely open for business even if the traditional High Street banks are tightening up – and crucially the money is a gift,” commented Dean Mirfin, Key Retirement Solutions, group director.
“Helping out family is a powerful motivation for retired homeowners and the sums being handed out are major amounts.”
The money these families in need receive is used for a variety of uses, ranging from helping clear debts, to buying houses and new cars.
Some families use the money to pay for a wedding, while others use it for a holiday or to help grandchildren pay their way through university.
This equity release given as gifts means it reduces potential inheritance tax which would reduce the amount if taken later.
Sons are more likely to be the recipients of handouts than daughters, with the average gift to a boy standing around £21,131, compared to the £18,625 daughters typically receive.
A Nation Burdened with Debt
Latest debt statistics confirm that many households are struggling with debt. According to Credit Action the average household debt rose in February from the previous month to almost £60,000.
However, the number of new cases received by the charity from those seeking help with financial problems dropped slightly, reflecting how the problem is getting worse for those struggling.
The Consumer Credit Counselling Service also revealed the majority of those advised to declare bankruptcy in the fourth quarter of 2010 were on a low income.
This highlights how many are simply not earning enough to afford their everyday living expenses.