It’s almost six o’clock and Mary Bartle, 84, is settling in for the evening as the temperature plummets. The energy crisis and worries about her payments mean she has only two of eight radiators on in her three-storey terraced house.
“I bought an electrically heated pad that I put on my knees under a blanket,” laughs Mary, a widow and retired secretary. ‘I sit next to my favorite radiator and I live very sparingly. I don’t have many needs’. It’s not like Mary doesn’t have money to pay for heating. Her late husband, a former 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 up with her payouts, which are well over £40,000 a year.
For someone who lives modestly and alone, who watches the price of milk and worries about the heating, you may wonder what on earth could cause such a rapid outflow of funds. The answer is simple: Mary, from Bromley in south-east London, has two daughters and four grandchildren aged between 15 and 23 – and she is the managing director of her very own “grand bank”.
Young families across the country have been pushed to the brink by the pandemic and the cost of living crisis. Rising inflation and interest rates, skyrocketing bills, mortgages and rents all take their toll.
And according to findings from 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 earned assets – who are picking up the financial pieces.
The survey, carried out in November and based on 2,000 Britons, found that one in six grandparents (17 per cent) now financially support two generations of their family.
A third were found to help grown-up children with weekly food shops and one in five paid for presents for grandchildren on behalf of their parents. While most (67 percent) reported being happy to help, 19 percent said they felt an obligation to keep their offspring afloat.
Another survey from last month found that 30 percent of those 65 and older, and 37 percent of those 55 to 64, are waiting on an inheritance to fund their retirement or pay off a mortgage.
The data from property website Zoopla shows how midlifers still rely on their parents, often in their 80s or 90s, to help out financially.
It’s a heavy burden, but I don’t want them to suffer
Chris Rudden, head of investment consultants at Moneyfarm, says much is due to the ‘bank of mum and dad’ going bust as a result of the cost of living crisis. He warns: ‘It is wonderful if the older generation are willing and in a good position to help. But before an offer of help is made, they have to make a financial guide to make sure they can afford it.’
Mary would agree. What started as an outpouring of generosity and excitement about being able to provide for her children and grandchildren has turned into something a little unnerving. She estimates she has given up to £40,000 a year to support her family in the past three years.
‘If you asked me if I would do anything differently, I would have been more careful and given less from the beginning. I don’t want to see them suffer, but it’s a heavy burden. I want to change the situation, but how do you stop giving once you’ve started?’
Mary’s son died 16 years ago after sudden health complications which devastated the family. Her daughter-in-law managed without her financial help until 18 months ago when her income dropped.
Since then, Mary has been giving £1,000 a month to help with the mortgage and living costs of her daughter-in-law and grandson, who is 21.
“I was a single parent for years when my children were growing up, so I know how hard it is,” says Mary. ‘They needed help and of course I would offer it. This is my son’s family.’ Mary has also paid for the last 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 a month each . She also pays for things like sneakers or clothes when they need them.
‘None of my grandchildren are serving yet. Today they don’t go to work quickly. At 17 I had a job as a secretary and my daughter was a hotel maid at 15.’ Although she would like them to get vacation jobs, they are reluctant to start anything that is not 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 worry is that the expansion of the Ultra Low Emission Zone (ULEZ) around London, due to come into effect in August, will mean two of her children’s cars will have to be replaced – something they will struggle to afford on own hand.
She realizes how lucky she is to have property, savings and a steady income, but being generous has come at a personal financial cost, with a large drop in her savings, as well as increasing anxiety about the future.
‘My savings are getting smaller,’ says Mary. ‘I look at it all and think, yum, all the benefits I got from my husband are gone. What will I do? I had planned to leave as much as I could to the family in my will so that they get 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 council worker living in London, is another grandmother who puts her hand in her pocket to provide for the generations below her.
As a baby boomer, she is fortunate to have been able to save up and pay off a mortgage. Her children, Amy, 29, and Nick, 24, are in very different situations. Nick, an apprentice electrician, still lives at home and Amy is studying social psychology, while her husband, Sam, is a local financial officer. The couple have a mortgage and two daughters, Annie, seven, and Florence, two, to support.
“Helping children and grandchildren is an easy matter,” says Julie. ‘My son is a part-time student and my daughter doesn’t have much 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 increased, and we have to help more and more.’
Julie and her husband, Patrick, a painter and decorator, estimate 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 gym fan Annie (£37 a month) and baby clubs for Florence (£6 a time) as well as children’s clothes. Last year they spent £1,200 taking the family on holiday to Devon and before the pandemic they funded a holiday to Spain. Amy gets £50 a month towards her energy bill and Nick gets help with his washing and food.
‘I have a pension and my husband still works,’ says Julie. ‘We have a rental property that helps us manage things financially. Without it, we would struggle. Bills are ridiculous. We have had to tighten our belts.
“I don’t use the tumble dryer, I groan if someone puts the underfloor heating on in the bathroom, and my husband is a yellow sticker man in supermarkets. I would like to help the children more, but we do as much as we can.’
Since they were young, Julie has looked after her grandchildren two days a week so that her daughter and son-in-law can return to work without worrying about childcare. “You just want to do everything you can to help them and give them a good life,” she says. ‘What is more important than children and grandchildren?’
It’s true that baby boomers have had the benefit of many socioeconomic advantages, some more impactful than others.
According to the Office for National Statistics’ latest Wealth & Assets Survey, property wealth in the UK has grown by 51 per cent over the past decade. Other asset prices, including stocks and shares, have also risen.
As Anthony Villis, CEO of First Wealth, a financial planning and wealth management company, says: “Costs were far lower when baby boomers started their savings and investment 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.’
Of course, not every Bank of Gran and Grandad has limitless cash flow, and some are starting to offer other ways to access 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, ages nine to 21.
I step in when a big bill comes up or a loan needs to be paid off
Fiona is a hair and make-up artist and cleaner, and Emma is a dog walker. Both are single, which puts a greater strain on their time and finances. “It’s the right thing to do,” says Linda.
‘Times are tough and I can’t see them struggling. Every Sunday I make a lamb or roast beef dinner for the whole family. They can’t always afford to get those kinds of meals. I pay for what I can that they need.’
This has recently included replacing a broken Xbox games console, funding driving lessons, £50 school trips, help with uniforms, school shoes, fashionable clothes for the older grandchildren, a holiday to Greece and repairing a van and the school run.
“It’s not that they bounce me,” says Linda. ‘They work hard and for themselves, which is not easy. I step in when a big bill comes up or a loan needs to be paid off’. The problem is, given the skyrocketing cost of living and rising interest rates, it’s happening with increasing regularity.
‘I want to enjoy my family while I’m alive. With the money from the house sale everything should last a good while, but I hate to think how they will cope if something happens to me.’
- Some names have been changed.