How grandma helps to save parents £3.5billion a year in nursery fees

Grandparents provide 766 million hours of childcare per year, saving parents £3.5billion in nursery costs, according to a new report.

The Resolution Foundation's 'intergenerational audit' found that seven in 10 mothers with a child under five years' old are working - up from 41 per cent in 1992.

But with high childcare costs, grandparents often step in to help - with more than a quarter supporting their children with parenting, the report found.

In total, grandparents provided an estimated 766 million hours of childcare to their grandchildren in 2022/23 - with an approximate nursery care value of £3.5billion.

But there has been no increase in the proportion of young children receiving care from grandparents nor the average hours received since 2005, likely due to later average retirement, ill health and age.

However, there has been an increase in the number of adults providing care for the sick, disabled or elderly - with nine per cent of adults providing at least five hours of care a week.

The report found that millennials in early adulthood are around '30 per cent more likely to provide at least five hours of such care a week than previous generations did at similar ages'.

Elsewhere, the report found that 'boomerang children' who have moved back in with their parents after leaving home save an estimated total of £3billion a month on rent.

Along with financial benefits, the Resolution Foundation said living at home can bring wider emotional support - and also allow young people to take career risks that could aid their future progression. 

However, it warned that prolonged co-residence with parents could have a negative impact by potentially preventing young adults from moving to parts of the country with better economic opportunities.

But parents play an increasing role in helping children move out and buy their own place.

Those helped by 'the Bank of Mum and Dad' are able to 'put down deposits twice as large, purchase larger first homes, and have smaller mortgage payments compared to those without assistance', the report noted.

One in three recent first-time buyers said they received help from friends or family, and the total value of financial gifts has more than doubled over the past decade to reach a record £29 billion over a two year period in 2018-20.

The report noted: 'Overwhelmingly, these gifts come from parents (73 per cent), and - inevitably - it's wealthy parents that give more. 

In 2018-20, 23 per cent of over-50s in the top wealth quintile reported giving a financial gift, compared to only 3 per cent in the bottom wealth quintile.'

Molly Broome, economist at the Resolution Foundation, said: 'As Britain gets older and wealthier, transfers between generations are playing a greater role in shaping peoples' economic prospects.

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'Families today play a bigger role in helping young people onto the housing ladder, helping older workers off the jobs ladder and into retirement, and supporting relatives when they're ill.

'These family transfers are hugely important and can be very rewarding. But they are not shared equally across society. 

Those who aren't lucky enough to have wealthy parents often struggle to secure a home of their own or enjoy early retirement.

'In recent decades, expanded childcare provision has boosted parental employment. 

'But the same expansion has not been seen for adult social care, which has limited employment opportunities for caregivers.

'Looking ahead, policy makers should ensure that adult care is valued as highly as childcare.'