By Alexandra Smith
As Sydney families grapple with massive mortgages, the rising cost of living and fears of job insecurity, grandparents are increasingly taking the financial burden and dipping into their life savings to pay their grandchildren's schools fees.
Almost one-third of grandparents are planning to draw down on their superannuation to pay school fees, research by industry super fund Rest shows.
Baby boomers are stepping in to help as their offspring feel the pinch, with official figures revealing that NSW residents are taking out bigger mortgages, borrowing on average $78,100 more than a year ago, with the average new loan for an owner-occupier now $437,100.
Families are also relying on double incomes, with recent census data showing that in 23 per cent of families in Sydney both parents work full-time.
Kumar and Chandrika Fernando will pay for their grandson's school fees. Credit: Wolter Peeters
For Sydney grandparents Chandrika and Kumar Fernando, helping their grandchild Viduk through school will take some pressure off their daughter.
Mrs Fernando has set up an education savings plan to ensure the couple has enough money set aside to pay for Viduk's high school fees at St Peter's Anglican College in Campbelltown. They also plan to help with his university fees.
"Education is very important but it is very tough in Sydney and it is hard for children now to go to private schools," Mrs Fernando said.
"But education was the best gift we could give Viduk."
The chief executive of Rest, Damian Hill, said he was surprised by the results of the research, published late last year in its annual white paper The Journey Begins, which surveyed more than 1000 working Australians aged over 50.
The research found that 36 per cent of retirees want to leave their children a "significant inheritance", while 29 per cent want to draw down on their super to pay school fees and 21 per cent planned to help their children pay for a deposit on a house.
"What comes through clearly is the desire of people approaching retirement to ease the financial burdens their adult children face today, especially buying a house and covering school fees," Mr Hill said.
The Australian Scholarships Group, an education savings fund, has estimated that NSW parents can expect to pay up $250,000 to cover the cost of a child's private education.
The research shows that a child born in NSW in 2016 can expect to pay more than $5000 in a year in preschool fees, $13,000 annually in private primary school fees and $23,000 a year in private high school fees by the time they graduate in 2034.
ASG chief executive John Velegrinis said grandparents had been increasingly contributing to school fees over the past five years.
"It's not a new thing but it is increasing and we are seeing a much greater propensity for grandparents to take an active part in helping support the future educational outcomes for their grandchildren," Mr Velegrinis said.
"Grandparents do tell us that firstly that they are trying to help their children, they are adult kids who have lots of other things to cope with, they have mortgage stress, other stresses and grandparents are very desirous of helping."
But it does not stop at school fees. Grandparents are also putting away their savings for the grandchildren's university fees.
Retired public highschool teacher Stuart Jacob has seven grandchildren and is putting money away for their tertiary education.
"Education is the best thing you can give a child," Mr Jacob said.