Grandparents fork out £400 a year on the family

Grandparent and child

Close to half of grandparents (42%) are saving for their grandchildren's future, and during the last year have put away an average of £154 each into a savings account, according to JPMorgan Asset Management.

They're also forking out an extra £257 each a year on things such as school uniforms, shoes and trips. And one in eight (12%) are also paying for, or towards, home improvements.

A third of grandparents (36%) also said they look after their grandchildren for free for more than 10 hours during an average week.

Keith Evins, head of UK funds marketing at JPMorgan, said: "It's fantastic that grandparents are able to provide such a level of both practical and financial help with their grandchildren, and indeed their own grown-up children."

The grandparents surveyed had also helped their own children financially – 36% had helped with living costs, 19% had helped with a deposit for a home, 32% with the cost of a wedding, 31% with a car and 28% with the cost of a holiday.

A quarter of grandparents admit they would like the money back – 8% had agreed to repayment terms, and 5% had already asked for the cash back.

Evins added: "The fact that the majority of this money is going into bank and building society accounts suggests grandparents could be missing a more productive approach.

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"Investing for children can be a great opportunity to take advantage of a long-term time horizon, and in these times of low interest rates, grandparents might want to consider the greater growth potential of the stockmarket.

"While the value of shares can fall as well as rise, a longer investment term can give the opportunity to ride out market volatility."