The time is approaching six o’clock and Mary Bartle, 84, is settling in for the evening as the temperature plummets. The energy crisis and concern for her outgoings means she has just two of eight radiators on in her three-storey townhouse.
‘I’ve bought an electric heated pad, which I put on my knees under a blanket,’ laughs Mary, a widow and retired secretary. ‘I sit next to my favourite radiator, and I am living very frugally. I don’t have many needs.’ It’s not that Mary doesn’t have the money to pay for heating. Her late husband, an ex-policeman, left her £100,000 when he died three-and-a -half years ago, and she has a comfortable annual income, from a pension and a rental property. Still, it’s not enough to keep pace with her outgoings, which are well in excess of £40,000 a year.
For someone living modestly and alone, who watches the price of milk and frets about the heating, you might be wondering what on earth could be causing such a swift departure of funds. The answer is simple: Mary, of Bromley, South-East London, has two daughters and four grandchildren aged between 15 and 23 — and she is the CEO of her very own ‘bank of gran’.
Young families across the country have been pushed to the brink due to the pandemic and the cost-of-living crisis. Rising inflation and interest rates, soaring bills, mortgages and rents are all taking their toll.
And according to findings by digital wealth manager Moneyfarm, it’s grandparents like Mary — those at the top of the generational food chain who are more likely to have savings and accrued assets — who are picking up the financial pieces.
The research, conducted in November and based on 2,000 Brits, found that one in six grandparents (17 per cent) are now financially supporting two generations of their family.
A third were found to be helping adult children with weekly food shops and one in five were paying for presents for grandchildren on behalf of their parents. While most (67 per cent) reported being happy to help, 19 per cent said they felt an obligation to keep their offspring afloat.
Another survey, from last month, found 30 per cent of those aged 65 and older, and 37 per cent of 55 to 64-year-olds, are waiting on an inheritance to fund their retirement or pay off mortgages.
The data from property website Zoopla shows how midlifers are still depending on their parents, often in their 80s or 90s, to help financially.
It’s a heavy load but I don’t want them to suffer
Chris Rudden, head of investment consultants at Moneyfarm, says a lot is down to the ‘bank of mum and dad’ going bust as a consequence of the cost-of-living crisis. He cautions: ‘It is wonderful if the older generation are willing, and in a good position, to help out. But before any offer of help is made, they do need to do a financial MoT to ensure they can afford to.’
Mary would agree. What started as a flurry of generosity and excitement at being able to support her children and grandchildren has shifted into something slightly unnerving. She estimates she has been giving up to £40,000 annually to support her family these past three years.
‘If you asked me if I would do anything differently, I’d have been more careful and given less from the beginning. I don’t want to see them suffer but it is a heavy load. I’d like to change the situation, but how do you stop giving once you start?’
Mary’s son died 16 years ago following sudden health complications, devastating the family. Her daughter-in-law managed without her financial help until 18 months ago when her income dropped.
Since then, Mary has given £1,000 a month to contribute towards the mortgage and living costs for her daughter-in-law and her granddaughter, who is 21.
‘I was a single parent for years when my children were growing up so I know how tough it is,’ says Mary. ‘They needed help and of course I was going to offer. It’s my son’s family.’ Mary has also paid for the past two holidays for the whole family, including herself, to Portugal last year (£10,000) and Italy the year before (£7,000), and gives the three grandchildren who are at university £100 each a month. She also pays for things such as trainers or clothes when they need them.
‘None of my grandchildren is earning yet. Nowadays they don’t go into work quickly. By 17, I had a job as a secretary, and my daughter was a hotel chambermaid aged 15.’ While she’d like them to get holiday jobs, they are reluctant to start something that isn’t an ideal job or position.
For six months during the pandemic, she gave one of her daughters £1,000 a month to help with her mortgage and a credit card for food, which Mary paid off monthly.
Mary’s latest concern is that the expansion of the Ultra Low Emission Zone (ULEZ) around London, due to take effect this August, will mean two of her children’s cars will need replacing — something they will struggle to afford on their own.
She is aware how fortunate she is to have property, savings and a steady income, but being generous has come at a personal financial cost, with a huge drop in her savings, as well as rising anxiety for the future.
‘My savings are diminishing,’ says Mary. ‘I am looking at it all and thinking, blimey, all the benefits I got from my husband are disappearing. What will I do? I had planned to leave as much as I could to the family in my will so that they have a big jump in their finances, and the grandchildren can have deposits on houses. That’s why I don’t want to fritter it away any more.’
Julie O’Connor, 62, a retired local government worker living in London, is another gran who is putting her hand in her pocket to support the generations below her.
As a baby boomer, she is lucky to have been able to save and pay off a mortgage. Her children, Amy, 29, and Nick, 24, are in very different situations. Nick, a trainee electrician, lives at home still, and Amy is studying social psychology while her husband, Sam, is a local finance officer. The couple have a mortgage and two girls, Annie, seven, and Florence, two, to provide for.
‘Helping the children and grandchildren is a no-brainer,’ says Julie. ‘My son is a part-time student and my daughter doesn’t have a great deal of money after the mortgage. She doesn’t ask for help, but I want to give them nice things. With the cost-of-living crisis, food and everything else has gone up, and we’re having to help more and more.’
Julie and her husband, Patrick, a painter and decorator, estimate that they give their children and grandchildren up to 10 per cent of their annual income, around £3,000, to help make their lives easier.
They pay for gym membership for gymnastics fan Annie (£37 a month) and baby clubs for Florence (£6 a go), as well as children’s clothing. Last year they spent £1,200 taking the family on holiday to Devon and, before the pandemic, funded a holiday to Spain. Amy is given £50 monthly towards her energy bill and Nick gets help with his washing and food.
‘I have a pension and my husband works still,’ says Julie. ‘We have a rental property that helps shoulder things financially for us. Without that, we’d be struggling. Bills are ridiculous. We’ve had to tighten our belts.
‘I don’t use the tumble drier, I moan if anyone puts the bathroom underfloor heating on and my husband is a yellow sticker man at supermarkets. I want to help out the children more, but we do as much as we can.’
Since they were little, Julie has looked after her grandchildren two days a week so her daughter and son-in-law can return to work without worrying about childcare. ‘You just want to do all you can to help them and give them a good life,’ she says. ‘What’s more important than children and grandchildren?’
It’s true baby boomers have had the benefit of many socio-economic advantages, some more impactful than others.
According to the Office for National Statistics’ most recent Wealth & Assets Survey, property wealth in the UK has grown 51 per cent over the past decade. Other asset prices, including stocks and shares, have also risen.
As Anthony Villis, managing director of First Wealth, a financial planning and wealth management company, says: ‘Costs were far lower when baby boomers started their saving and investing journeys and this has worked with lucrative, inflation-matched pensions to create the perfect conditions to give them a higher level of ability in today’s markets.’
Not every Bank of Gran and Grandad has a limitless cash flow of course, and some are beginning to offer other ways of accessing money.
Linda Daly, 68, a retired care home worker, who lives in Leamington Spa, Warwickshire, near her two daughters, Fiona, 42, and Emma, 41, is in the process of selling her house so she can move in with Emma and be in a better position, physically and financially, to help them and her five grandchildren, aged nine to 21.
I step in when a big bill comes in or a loan needs to be paid of
Fiona is a hair and make-up artist and cleaner, and Emma is a dog walker. Both are single, which places a greater strain on their time and finances. ‘It is the right thing to do,’ says Linda.
‘Times are hard and I can’t see them struggle. Every Sunday I make a lamb or beef roast dinner for the whole family. They can’t always afford to get meals like that. I pay for whatever I can that they need.’
Recently this has included replacing a broken Xbox games console, funding driving lessons, £50 school trips, helping with uniforms, school shoes, fashionable clothing for the older grandchildren, a holiday to Greece and repairing a van, as well as the school run.
‘It isn’t that they sponge off me,’ says Linda. ‘They work hard and for themselves, which isn’t easy. I step in when a big bill comes in or a loan needs to be paid off.’ The problem is, given soaring living costs and rate rises, that is happening with increasing regularity.
‘I want to enjoy my family while I am alive. With the money from the house sale, everything should last a good while but I hate to think how they will cope if anything happens to me.’
- Some names have been changed.
