With the upcoming school holidays two in five grandparents will provide childcare with many paying for treats and activities.
The survey from Lloyds Bank commissioned by YouGov shows 42% or over five million hard working grandparents come to the rescue to provide childcare over the school holidays.
Parents in the UK spend on average £350 per month on childcare equivalent to 20% of the monthly average disposable income.
For young parents renting from buy-to-let landlords they have even less disposable income than homeowners and would benefit from help from grandparents.
Grandparents spend 8 hours a week caring for their grandchildren and based on the average salary of a childcare worker at almost £8 per hour, this help is the equivalent to £3,200 worth of childcare throughout the year.
Childcare a financial burden for parents
The survey found that 61% of working parents rely on childcare support such as nurseries, childminders, family or friends during the year.
Miles Ravenhill Director Lloyds Bank said, the cost of childcare can be a big financial burden for parents, especially during the summer holidays when most children can be off school for up to six weeks.
The cost of childcare is not only a financial burden but also can impact your ability to purchase a home if you are a first time buyer requiring a larger deposit.
As grandparents you could also help first time buyers with the deposit by releasing cash from your home using a lifetime mortgage.
Lenders determining your maximum loan for a residential mortgage based on your ability to afford the repayments including the monthly repayments whereas to release equity, provider loan to values are based on age.
Find out if you can help a family member with the deposit for a property by releasing cash from your home and the best products at this link:
Free equity release quote to access cash and gift to your family for a deposit.
Since the introduction of the Mortgage Market Review (MMR) in April 2014, lenders are responsible for assessing affordability for first time buyers, remortgage buyers and home movers when securing or increasing a loan.
Lenders must take into account your income and commitments such as child care costs and outstanding loans which is stressed tested in relation to your ability to afford the mortgage even with a rise in interest rates.
This could restrict homeowners at the end of their mortgage deal with the remortgage buyer selecting a new preferential rate with their current lender where affordability checks are not necessary.
Grandparents happy to help
Two thirds of grandparents said they were happy to help look after their grandchildren and a third were proactive at offering support.
Of all the grandparents polled, 71% said they were able to spend more time with their grandchildren than they themselves were able to send with their own grandparents.
In addition to the childcare support provided by grandparents, 26% say that they also cover the costs to keep the children entertained with activities and 70% buy them treats when looking after them.
Higher property values for grandparents allows the equity release buyer to access cash for a specific reason such as to give funds for childcare or even pay university fees for grandchildren.
Not all grandparents will have acceptable property for equity release and therefore may not be able to help financially but willing to offer their time.
Mr Ravenhill said, our latest research has found that grandparents are set to support many families across the country, helping parents juggle work and childcare during the school holidays.
Families who don’t have savings to fall back on could find that the summer months are a particularly hard time if they don’t have friends or family who can help or suggest ways of raising extra money.
What are your next steps?
Talk to our London City Mortgage advisers if you are an older homeowner and we can recommend the lifetime mortgage and specialist legal advice so you can access cash from your property.
See the maximum amount you can release with a lifetime mortgage for home improvements or gift to family members using this link:
Free equity release calculator to show the amount you can release from your home.
Our mortgage advisers can find the most cost effective product for your needs. Learn more by using the equity release calculator, property value tracker chart and mortgage costs calculator.
