Grandparents expecting to provide regular financial support to their grandchildren could need an extra £58,000 in pension savings to maintain a moderate standard of living in retirement, analysis by Skipton Building Society has found.

The lender found that almost one in five (21 per cent) working adults expect to financially support grandchildren during retirement, while almost half are concerned about running out of money later in life.

The research found those who plan to offer financial support expect to begin doing so at the age of 65 on average.

Based on retirement living standards, Skipton estimated that someone retiring at 67 would need around £370,000 in pension savings to fund a moderate retirement until age 88.

Providing grandchildren with £250 a month would increase the required pension pot to around £428,000, while giving £500 a month would raise the target by around £116,000.

Skipton said its findings raise questions how future retirees may balance supporting younger generations with their own financial security.

Skipton Building Society head of financial advice distribution, Helen McGinty, said: "These costs need to be planned in for, as even relatively modest amounts of regular support can add tens of thousands of pounds to the retirement savings needed over a lifetime. Also, the answer isn’t always just saving more into a pension.

"With changes to inheritance tax rules bringing pensions more firmly into estate planning in 2027, people should consider looking at their future finances holistically."

This article originally appeared in our sister publication MoneyAge.

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