Telegraph idea: Are grandparents spending their savings or pension on their grandchildren?

Yes they are and it tells you everything about where we've ended up. The wealth in this country sits with the grandparents. They're the last generation that learned to save that treated thrift as a virtue, not a punishment. Their children never did. The parents are the overleveraged ones, running their lives on credit, financing a lifestyle they can't really afford. So when the bills land, childcare, deposits, the weekly shop, it's the grandparents who reach into their pockets, because they're the only ones with anything in them. Britain stopped being a nation of savers long ago. We became a nation of borrowers and dressed it up as aspiration. The cost of living crisis is simply exposing that. The oldest generation is quietly subsidising the two beneath it, drawing down savings and pensions they assumed would see them out. It's generous. It's also a warning. When the people who saved are gone, who's left to catch the fall?

The Bank of Mum and Dad has quietly become the Bank of Grandma and Grandad. Among our clients, grandparents are increasingly gifting for school fees, nursery costs and house deposits, often using the 'gifts from surplus income' exemption, one of the most underused tools in inheritance tax planning. The drivers are clear. Between £100,000 and £125,140 of income, the withdrawal of the personal allowance creates a 60% effective marginal tax rate, while many families also lose valuable childcare support. Years of inflation have further squeezed household budgets. Add pensions falling into the inheritance tax net from April 2027, and many grandparents conclude wealth is better deployed helping family today than remaining within an estate that could face a 40% inheritance tax charge. The great wealth transfer is already underway. Our advice: gift with a plan, not on impulse, and never at the expense of your own financial security.

We're seeing more grandparents using their wealth proactively rather than waiting to pass it on.
Many are funding school fees, childcare and helping with day-to-day costs as younger families face ongoing financial pressure.
Others are taking a longer-term view by contributing to Junior ISAs and Junior Pensions, giving investments years to compound while creating a meaningful financial foundation.
For wealthier families, gifting from surplus income can also be a highly effective inheritance tax planning strategy, allowing them to support children and grandchildren today, reduce their future estate and see the positive impact of their generosity during their lifetime.

Grandparents are becoming the emergency fund nobody talks about. They are helping with deposits, rent, childcare, university costs and the everyday gaps younger families cannot cover after housing, bills and food have taken their share.

It is rarely about spoiling grandchildren. It is about watching your child struggle and wanting to take some pressure off. For many, childcare help is the difference between a parent being able to stay in work or not.

But there is a difficult line. A grandparent can give away savings, dip into a pension or delay their own plans with the best intentions, then find later-life costs, care needs or inflation have caught up with them. That can create a bigger problem for the same family later.

Support should come from a plan, not guilt. Families need honest conversations about what is affordable, whether it is a one-off gift or ongoing help, and how long it can continue. The Bank of Grandma and Grandad is loving, but it is not limitless.