Grandparents warned against using pension pots to help out their grandchildren
10 Nov 2015
Pension funds are being used by grandparents to supply their grandchildren with financial aid, according to new research from retirement planning specialist LV=.
The new research indicates that a quarter of grandparents have made use of their retirement stash to help grandchildren, with an average sum of £1,633 being handed out.
The data also reveals that an additional £2,938 is planned to be given away by grandparents in the future.
Grandparents are providing their grandchildren with funds for university fees and deposits on new homes, amongst other costly investments.
Research from LV= has also indicated that one in seven grandparents plan to extract money from their pension pots to give to their grandchildren, upon reaching retirement age.
Many grandparents have decided to gift money to their grandchildren as a result of rising living costs.
It is, however, important that grandparents do not run the risk of compromising their own living standards. Managing director of LV= retirement solutions, John Perks, stated: ‘It’s important that grandparents ensure they have enough money left for themselves.
‘Even smaller outgoings like bills can become harder to meet later in life as the cost of living rises.’