Grandparents support their families financially in two main ways that official statistics capture: unpaid childcare, valued in billions of pounds a year, and cash gifts and loans, most of which flow to younger relatives. This piece pulls together the named data sources and explains how the gifting rules can interact with inheritance tax.
The figures below come from the Office for National Statistics (ONS), HM Revenue & Customs (HMRC) and gov.uk. Where a number is an estimate produced by a charity or research body, it is labelled as a clearly-attributed secondary source. This is general information for England and Wales, not advice, and figures are current as at July 2026 and subject to change.
Key figures at a glance
Grandparent support shows up across several official datasets rather than in a single headline. Around 7 million working-age grandparents live in Britain, roughly 63% of grandparents with grandchildren under 16 help with childcare, and about 6% of adults received a cash gift or loan of £500 or more over a two-year period (gov.uk, 2013; ONS, July 2014 to June 2016). The table gathers the headline statistics with their source and reference period.
| Statistic | Figure | Source & period |
|---|---|---|
| Working-age grandparents in Britain | About 7 million | gov.uk, 2013 |
| Grandparents (with under-16 grandchildren) who help with childcare | About 63% | gov.uk, 2013 |
| Working families using grandparents for childcare | About 1 in 4 | gov.uk, 2013 |
| Estimated annual value of grandparent childcare | £7.3 billion | gov.uk (attributed estimate), 2013 |
| Adults receiving a cash gift or loan of £500+ (two years) | About 6% | ONS, Jul 2014-Jun 2016 |
| Median value of those gifts and loans | £2,000 | ONS, Jul 2014-Jun 2016 |
| Adults aged 25-34 receiving £500+ (the most likely age band) | About 11% | ONS, Jul 2014-Jun 2016 |
Sources: gov.uk (2013) and ONS (July 2014 to June 2016), subject to change. Some figures are several years old and methodologies differ between sources, so they are best read as indicative rather than precise.
Childcare: the largest hidden contribution
Unpaid childcare is the biggest single way grandparents support their families in cash terms. Government reporting put the number of working-age grandparents in Britain at around 7 million, with about 63% of those who have grandchildren under 16 helping with childcare and roughly one in four working families relying on grandparents (gov.uk, 2013, subject to change).
The often-quoted £7.3 billion annual value of that care is an estimate attributed to Grandparents Plus and Age UK and repeated in the same gov.uk release (gov.uk, 2013). It is a dated modelling estimate rather than a measured cash flow, so it is shown here for scale. Grandparents providing this care while under State Pension age may be able to claim Specified Adult Childcare National Insurance credits, which can count towards their own State Pension (gov.uk, as at July 2026, subject to change).
Cash gifts and lifetime transfers
Direct money transfers are smaller in aggregate than childcare but well documented. ONS analysis of the Wealth and Assets Survey found about 6% of adults received a cash gift or loan of £500 or more over a two-year period, with a median value of £2,000 (ONS, July 2014 to June 2016, subject to change). Grandparents often sit on the giving side of that flow.
The same ONS release shows the money is concentrated among younger recipients. Adults aged 25 to 34 were the most likely to receive a gift or loan of £500 or more, at about 11%, while the highest median value, £2,500, was among recipients aged 25 to 44. People aged 55 to 64 were the age group most likely to receive an inheritance (ONS, July 2014 to June 2016, subject to change). That age pattern is consistent with grandparents and parents helping at the point younger relatives buy homes or start families, the same territory covered by the Bank of Mum and Dad.
| Recipient age band | Received £500+ gift or loan | Median amount |
|---|---|---|
| All adults | About 6% | £2,000 |
| 25 to 34 years | About 11% (most likely to receive) | Not separately published |
| 25 to 44 years | Highest median gift or loan | £2,500 |
| 55 to 64 years | Most likely to receive an inheritance | Largest inheritances |
Source: ONS, Intergenerational transfers, Great Britain, July 2014 to June 2016, subject to change.
What the numbers mean
Read together, the data suggests grandparent support is weighted heavily towards time rather than cash: the modelled £7.3 billion childcare figure dwarfs the recorded cash gifts, where a typical gift or loan sits at a £2,000 median (ONS, Jul 2014-Jun 2016). In our view a few cautious points follow, none of which should be read as advice.
- Much support is invisible to tax data. Childcare and informal help leave little paper trail, so the tax and wealth statistics can understate what grandparents actually contribute.
- Cash gifts are modest and clustered. The typical recorded gift is small and tends to reach relatives in their late twenties and thirties, which fits life stages such as house deposits rather than one-off windfalls (ONS, Jul 2014-Jun 2016).
- Larger transfers often wait for death. The biggest sums move as inheritances to people aged 55 to 64, which is one reason many families also weigh up lifetime giving as part of wider planning.
Because several of these datasets are some years old and use different methods, the direction of travel matters more than any single decimal point. Anyone weighing up giving during their lifetime may find it worth discussing the numbers with a qualified professional who can look at their own position.
Grandparent gifting and inheritance tax
Where grandparents do give cash, the inheritance tax rules shape how much can pass tax free. Each person has an annual exemption of £3,000, can make small gifts of up to £250 per person, and can give a grandchild up to £2,500 as a wedding gift, all free of inheritance tax (gov.uk, as at July 2026, subject to change). Larger gifts can still fall outside an estate if the giver survives seven years.
Beyond those exemptions, a gift is generally a potentially exempt transfer: no inheritance tax is due if the person lives for seven years after making it, with taper relief reducing the charge on gifts made three to seven years before death (gov.uk, as at July 2026, subject to change). This sits alongside the main thresholds, where the nil-rate band is £325,000 per person and the residence nil-rate band up to £175,000, allowing up to £1,000,000 for some couples, all frozen to the end of the 2030-31 tax year (5 April 2031) (gov.uk, as at July 2026, subject to change). You can read more in our Inheritance Tax Explained guide.
One caution some families overlook: giving assets away can also be examined by a local authority if care is later needed. Where someone deliberately reduces their assets to increase help with care costs, that can be treated as deliberate deprivation and challenged (gov.uk, as at July 2026, subject to change). Gifting to grandchildren is common and legitimate, but it is not a route to deliberately avoid care fees, and the interaction with means-testing is one many people choose to discuss with a qualified professional. For the wider picture, see our estate planning guide.
Sources and methodology
Every statistic here comes from a named official source or a clearly-attributed estimate, verified against the publisher's page. Figures are drawn from ONS survey data, HMRC and gov.uk guidance, and one older government news release. Reference periods differ, so figures are not directly comparable year to year.
- Grandparent numbers and childcare value: gov.uk news release, 2013 (the £7.3 billion figure is an estimate attributed to Grandparents Plus and Age UK).
- Cash gifts and loans: ONS, Intergenerational transfers, Great Britain, reference period July 2014 to June 2016 (Wealth and Assets Survey).
- State Pension credits: gov.uk, Specified Adult Childcare credits, as at July 2026.
- Gift and inheritance tax rules: gov.uk, Inheritance Tax on gifts and gov.uk, Inheritance Tax, as at July 2026.
- Care means-testing: gov.uk, Paying for your care, as at July 2026.
Frequently asked questions
How much financial support do grandparents give in the UK?
There is no single total, because much of it is unpaid time rather than cash. Government reporting valued grandparent childcare at an estimated £7.3 billion a year, an attributed estimate (gov.uk, 2013, subject to change), while recorded cash gifts and loans of £500 or more had a median of £2,000 (ONS, July 2014 to June 2016, subject to change).
How many grandparents provide childcare?
Government reporting put the number of working-age grandparents in Britain at around 7 million, with about 63% of those with grandchildren under 16 helping with childcare and roughly one in four working families relying on them (gov.uk, 2013, subject to change). These are older figures, so they are best read as broad scale rather than current precision.
Can grandparents give money to grandchildren tax free?
Often, yes, within limits. Each person has an annual exemption of £3,000, can make small gifts of up to £250 per person, and can give a grandchild up to £2,500 as a wedding gift free of inheritance tax (gov.uk, as at July 2026, subject to change). Larger gifts can still fall outside the estate if the giver survives seven years, depending on circumstances.
Do grandparents get anything for looking after grandchildren?
They may build State Pension entitlement. Grandparents under State Pension age who care for a child under 12 can apply for Specified Adult Childcare National Insurance credits, which can count towards their own State Pension (gov.uk, as at July 2026, subject to change). Eligibility depends on the circumstances, and it can be worth checking the guidance before applying.
Does giving money away affect care fees?
It can. If someone deliberately reduces their assets to get more help with care costs, a local authority may treat this as deliberate deprivation and still take the value into account (gov.uk, as at July 2026, subject to change). Ordinary gifts to grandchildren are common and legitimate, but giving cannot be used to deliberately avoid care fees, and many people discuss this with a qualified professional.
Is the data the same across Scotland and Northern Ireland?
The ONS gift and inheritance figures cover Great Britain, so they include Scotland but not Northern Ireland. Inheritance tax is UK-wide, but Scotland has its own succession law and care-funding rules, and Northern Ireland runs a separate system. If your family or estate touches more than one nation, it can be worth taking advice in each.