Grandkids emerge as retirement security riskReprints
Grandchildren, once thought to be harmless, have emerged as a potentially devastating threat to pension plans everywhere, a new study found.
According to the study by financial services firm Liverpool Victoria Friendly Society Ltd., doing business as LV=, 2.4 million grandparents in the United Kingdom have helped their grandchildren financially by taking funds from their pensions or plan to in the future.
A quarter of U.K. grandparents who have already given away money to their grandchildren have taken the funds from their pension, while 16% plan to once they reach retirement age, LV= said in a statement.
By dipping into the pension, savings and wages, the average grandparent has given £1,633 ($2,458) to grandchildren, and plans to give away £2,938 ($4,421) more in the future.
Twenty-one percent of charitable grandparents use their pension funds to help grandchildren with housing payments, 20% fund university fees, 17% pay for cars, 21% help out with bills, and 19% pay for grandchildren's hobbies, according to the study.
“With one in five (grandparents) using their pension to help out, it's important these kind individuals plan for their retirement and have enough money left for themselves, as even smaller outgoings like bills can become harder to meet later in life, as well as the flexibility to access it,” John Perks, managing director of retirement solutions at LV=, said in the statement.