The Bank of Gran and Grandad is expanding its student lending as the new academic year gets underway at universities across the UK, new research* from the UK’s leading independent equity release adviser Key shows.
More than one in three (35%) grandparents – around 4.9 million people** - have already helped or are planning to help fund their grandchildren through university, its nationwide study shows.
Around 15% of grandparents say they have already contributed and another 20% are planning to help over the next 10 years, Key’s research found. It’s not just grandchildren being helped around 6% of over-55s homeowners will help nieces, nephews and godchildren.
Raiding Savings to Support Studies:
Most are using their cash savings to support students but a growing number, around 11%, are looking at accessing property wealth for this purpose through downsizing, selling other properties, remortgaging and equity release.
The 412,490*** UK students starting courses at universities this month will value the support – graduates are estimated to leave university with average debts of £50,000 which they will start repaying once they earn above £25,725. The Government**** lends more than £16 billion a year through the Student Loans Company and more than £121 billion of loans are currently outstanding.
But most students will not need to repay the Bank of Gran and Grandad – Key’s research found nearly four out of five (79%) grandparents regard the cash as a gift while 18% expect students to only repay some of the money. Just 3% expect their money back.
The table below shows where the Bank of Gran and Grandad is finding the money to help students from.
| WHERE THE MONEY COMES FROM |
PERCENTAGE |
| Cash savings |
87% |
| Long-term investment |
9% |
| Pension funds |
4% |
| Downsizing |
5% |
| Selling other properties |
2% |
| Re-mortgaging |
2% |
| Equity release |
2% |
| Unsecured personal loan |
2% |
Will Hale CEO at Key said: “The over-55s are a generous generation with many looking to help their loved ones, especially when it comes to something as important as education. The cost of higher education can seem daunting with students leaving university with average debts of £50,000 as well as their degrees.
“While some of these student loans will eventually be written off, many successful graduates will find that they are using their hard earned cash from their early years of employment to make these payments rather putting aside money for their first home or other long term goals.
“Retired homeowners are mainly using savings to help fund university fees but are also turning to their property wealth using alternatives such as equity release to support families.
“When making any significant financial decisions good specialist advice is key to ensuring older homeowners use their property wealth in the best way to support their own needs and aspirations and those of their families.”
ENDS
Notes to Editors
For more information or to request a case study, please contact:
Lee Blackwell
Director of Public Relations and Public Affairs
Key Retirement Group
07384511140
E-mail:
[email protected]
Rachel Mann
Key Retirement Group
01772 508322
E-mail:
[email protected]
Citigate Dewe Rogerson
Katie Ormrod
0207 025 6440
E-mail:
[email protected]
About Key
- Part of Key Retirement Group, Key is the UK’s largest independent equity release broker – committed to high levels of customer service and the belief that good advice is key to ensuring people make smart sustainable choices around how they use their housing equity.
- With over 60 industry and consumer awards under their belt, the Key team offer advice on equity release, later life mortgages and retirement interest-only products. The company also provides support with estate planning including wills and lasting power of attorneys.
- Key is committed to putting customers at the heart of what it does and has a score of 9.8 from over 14,700 scores on the independent review site, Trustpilot.
- Based in Preston, Key is committed to being independent, transparent and straightforward.
