How the bank of grandparents is shaping the economy

Move over bank of mum and dad – new research reveals it's the grandparent economy that is funding younger generations home buying and living expenses.

More grandparents are opening up their wallets to help their Gen Z grandchildren buy a home.

New research from McCrindle Research has revealed that younger generations are relying not on the bank of mum and dad, but on their grandparents to help them buy houses, live rent free or help fund cost of living challenges.

The research revealed that 12 per cent of Gen Z have received financial support from their Grandparents to buy their home.

It also showed that 13 per cent of Australians say they have received financial inheritance from their grandparents, while 11 per cent live with them for free or reduced rent.

Almost one in eight Gen Z said they have had help from grandparents to buy their home.

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Baby Boomers make up 21 per cent of the population and own 48 per cent of the national wealth.

The youngest ‘Boomers’ are turning 60 this year, with the eldest reaching their late 70s. Their wealth transfer to the younger generations have a significant impact on the economic landscape, according to McCrindle.

Principal social researcher, Mark McCrindle, highlights the imminent impact grandparents have on the financial economy.

Grandparents have also funded education, travel and help with child care.

“Grandparents are increasingly playing a greater role in the lives of their children and grandchildren, particularly for their education and home purchasing,” he said.

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Almost one in five Gen Z had received help from their grandparents to pay for education.

This support also extends to grandparents helping alleviate other financial burdens like child care as well as money for travel.

Increased amount of wealth transfer may shape the economy, according to McCrindle.

“As we look to the future and an increasing amount of wealth will be transferred

to younger generations, grandparents will see to continue to have a building impact on the financial climate of Australia,” Mr McCrindle said.

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Originally published as How the bank of grandparents is shaping the economy