Grandparents who plan to provide regular financial help to their grandchildren during retirement may need to save tens of thousands of pounds more to avoid straining their own finances, new analysis from Skipton Building Society suggests.
The research found that one in five working adults (21%) expect to support their grandchildren financially in later life, with many intending to start at age 65. However, even modest monthly contributions could significantly increase the required pension pot.
Cost of supporting grandchildren
Skipton modelled the pension savings needed for a moderate standard of living based on the Retirement Living Standards. For someone retiring at 67 and drawing income until 88, the estimated pension pot needed is around £370,000. If they provide grandchildren with £250 per month, the required savings increase by roughly £58,000 to £428,000. For those giving £500 per month, the extra needed is about £116,000, bringing the total to £486,000.
The findings come as 48% of working adults worry about running out of money in retirement, highlighting the tension between supporting younger generations and ensuring personal financial security.
Expert advice on planning
Helen McGinty, head of financial advice distribution at Skipton Building Society, said: "While many families will naturally want to support their grandchildren where they can, whether that's contributing to education costs, childcare, clothing or simply giving regular financial support, it's important people don't assume this support will simply fit within their existing retirement plans."
She added: "These gestures can make a real difference to family members, but these costs need to be planned in for, as even relatively modest amounts of regular support can add tens of thousands of pounds to the retirement savings needed over a lifetime."
Considerations for the future
McGinty also urged people to review their overall finances, especially ahead of planned inheritance tax changes affecting pensions from 2027. She emphasised understanding retirement savings before committing to regular family support.
Skipton noted that its modelling uses today's money, assumes retirement from 67 to 88, and is based on the Retirement Living Standards. The figures are illustrative examples, not recommendations for every household.
