Cash is still the most popular method for grandparents passing down assets to grandchildren, according to new research from Killik & Co.
The investment firm found that over four in ten (43%) grandparents have stated they currently gift in cash, although when asked how they intend to gift following the COVID-19 pandemic, those giving cash rose to almost half (49%).
Killik & Co, whose research quizzed 2,006 grandparents and asked how they’re supporting their grandchildren, suggested that a further 15% are currently choosing to pay into a Junior ISA so that their grandchildren have a lump sum of money for when they reach 18, while 9% said they’re happy to help to pay off their grandchildren’s personal debts.
The COVID-19 pandemic has, however, caused a shift in how grandparents intend to pass their money on, Killik & Co added. The findings showed that just 6% help with house deposits and 5% with university fees.
When asked how they intend to help their grandchildren when life begins to return to normality, however, this increased to 11% for both.
“Our research shows that cash is understandably still very popular with grandparents looking to help their grandchildren, but it’s interesting to note that people are starting to look at alternative ways to offer financial support as well – perhaps as a consequence of the impact that COVID-19 has had on financial concerns,” Killik & Co head of wealth planning, Svenja Keller, commented.
“It’s worth remembering the form in which money is gifted does not determine its destination, and grandparents gifting cash ultimately give significant flexibility to their grandchildren, who can then decide whether to spend the money, save it for a rainy day or invest it for the future and benefit from the power of compounding.
“Families may not be aware of all the options available to them when it comes to passing on wealth tax efficiently or helping children financially. A conversation with a wealth planner will help you identify what’s best not just for the younger members of the family but for all generations.”
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