Research carried out by NSM Research on behalf of Yours magazine has concluded that the average cost of being a grandparent (over the first 18 years of their grandchild’s life) is £50,252. If the grandparent contributes towards private education and a deposit on their first home, this rises to over £120,000, as was reported in the Telegraph today.
This continues the trend in recent years of grandparents picking up increasingly more of the burden, both financially and in terms of time.
Unless your kids are really demanding, you probably won’t need to consult your solicitor to get you out of babysitting for the little darlings. However, if you are a grandparent providing financial support (for example, school fees) there are a number of steps you can take to reduce the cost of helping.
For example, many grandparents put money or investments on trust for their grandchildren. Any growth in the fund gives rise to tax on the grandchildren (which in most cases will mean that there is effectively no tax). This may also be effective inheritance tax planning.
If you would like to discuss tax planning to provide for your grandchildren, please contact me or any member of the Wealth Management team on 01923 20 20 20.