We regularly hear and see comments about the role of the ‘Bank of Mum and Dad’. This comes as no surprise as many who already retired are now in a position to provide additional funds for their children…and many are happy to do so as they can see the benefits of the money and the way it’s being spent today rather than their children receiving the cash on their death, by which time they may not need the money so urgently.

However, it’s all too easy to forget the role that Grandparents often play providing cash, not just to their children but also to their grand-children.

Twice in the last few years I have been asked to raise money to pay educational fees. In both cases this was due to the son being made redundant and rather than see the grandchildren taken out of their private school, they have made provision for the fees to be paid by releasing equity in their home.

The case made was that this way, the grandchildren would be able to stay in their present school and the Grandparents can continue to make the financial contribution to provide ‘the best education they can afford’.  In these situations, I’m reminded of the start to the television series, The Inbetweeners where one of the cast members, Will, has been pulled out of private school as his mother can no longer afford the fees due to her divorce and we then see the harassment he receives from fellow school pupils when moved to a state school.

I’m sure that this series isn’t a true representation of what would happen but I guess that the thought of moving children from private to state education doesn’t appeal to those involved.

But it’s not just providing educational fees. We see the grand-parents, who can be in a better financial position than their children, providing the deposit for the grandchildren to enable them to get into the housing market, effectively by-passing their children’s inheritance.

I just hope that when this is done that the work carried out by their solicitors protects the money should the grandchildren later marry or enter into the purchase of a property on a joint basis with a future partner.

Chris Chance