10 ways grandparents can help give their grandchildren the best start financially

Summer school holidays can be a busy time for grandparents, with two-fifths (42%) saying they've been lined up to provide free childcare, according to a survey by Lloyds Bank.

It can also be an expensive time. A quarter (26%) have been, or are currently funding activities over the summer while kids are under their watch, the research also found.

"Grandparents are summer holiday saviours, bridging the gap between annual leave and the never-ending school holiday," says Sarah Coles, a personal finance analyst at Hargreaves Lansdown.

And this is just the tip of the iceberg for many, with lots of grandparents also helping out younger generations with university costs or getting on the housing ladder, or dipping into their bank accounts when kids need something new.

Of course, if you have the means to do so, being able to help your grandchildren financially is possibly something you're keen to do - but it's a good idea to think about the most sensible ways of going about it, and balancing generosity with helpful life-lessons too.

Here are 10 tips from Hargreaves Lansdown for how grandparents can help to transform their grandchildren's lives financially...

1. Teach them about money early

Grandparents have the freedom and space to plan the sorts of handy money lessons that harassed parents may not have time for. Everything from simple money games to Monopoly marathons can get them used to the idea of money, while shopping trips with a budget can help them learn to prioritise. Grandparents taught their own children about money - Hargreaves Lansdown says two-thirds of people learned about financial issues from their parents - so they already have plenty of experience.

2. Kick-start good habits

You can give them their first money box and talk to them about saving up. Check their savings account statements regularly with them, so they can see the impact on a regular basis.

3. Encourage the savings habit by helping them to set goals to buy something they really want

Set them a goal which they can reach in a few weeks. Once they have reached that, set another, which is a little further away. Matching what they save pound for pound really helps here. They'll reach their goals much quicker.

4. Get them into investing

A Junior Isa can be a great way to do this, by talking to them about specific companies they've invested in through the shares and funds in their account. As they get older, you can help them assess their investments, so when they have control of the funds, they're comfortable making investment decisions themselves.

You may want to consider lending a hand in building the Junior Isa - which could make a huge difference, particularly in the early expensive years, where parents have a battle to make ends meet.

5. Support them from income with school fees or university costs

If you can afford sums from your income that don't affect your standard of living, then you could make regular payments that offer a dual benefit. Not only will it help your grandchildren cover their costs, but, depending on the circumstances, the cash may also be considered to be out of your estate for inheritance tax purposes.

6. Help them budget

As grandchildren get older, give them greater responsibility to fend for themselves. Advance money which involves them setting a budget for several items.

7. Help them onto the property ladder

One way to boost the cash you give your grandchildren for a property deposit is to pay them up to £4,000 a year from the age of 18, and agree they'll put it into a Lifetime Isa. The Government will add a 25% bonus on top, up to a maximum of £1,000, super-charging your gift and getting them closer to home ownership.

8. Don't always bail them out

When it comes to money, it's worth talking to their parents and agreeing a strategy. If grandchildren grow up knowing you'll always help them out if they run out of money, it gives them no opportunity to learn how to balance their budget.

In very serious situations, help from grandparents may keep grandchildren's debts from overwhelming them. But if you're being asked for cash every month, it may be a good idea to let them know that the Bank of Gran and Granddad isn't open for regular withdrawals.

9. Pay into a Junior Sipp (self-invested personal pension)

It can seem bizarre to consider their retirement when they're still in nappies, but saving for their first 18 years can give them a vital head-start. If you paid in £40 a month from birth-18, they could end up with over £70,000 in their pension at the age of 60, based on typical investment growth rates. But remember that investments can go down in value as well as up.

10. Consider leaving them a lump sum in your will

They will remember this fondly and it could make a real difference to getting them onto the housing ladder or just giving them a good start in life.

HOW... SOME 'MONEY SAVING' TRAVEL HACKS COULD COST YOU IF YOU'RE DELAYED

Airline travel hacks such as split ticketing (when you split your journey into two parts with one or more airline) can be a handy way to save money on foreign travel. But holidaymakers booking flights with overseas connections are being urged to check their insurance covers them.

More than half of all travel insurance policies on the market do not include cover for missed connections overseas as standard, according to financial information business Defaqto, which found that just 384 out of 1,157 annual and 354 out of 1,129 single trip policies have this cover as standard.

Brian Brown, head of insight at Defaqto, says: "The risk is where people are arranging their own travel with separate travel providers for part of a journey. Typically, this might mean you book a flight with one airline to a European or Middle-East hub, and then an onward flight with a separate airline.

"If your first flight is delayed and you arrive too late to catch the onward journey, the second airline is unlikely to want to help you - your seat was available and the plane left on time, so they have done all they are required to do."

He says if all your travel legs are with the same provider, they may find you alternative travel and temporary accommodation. Similarly, those booking travel as a package with a single provider, such as a travel agent, may enjoy protection from Atol to ensure problems are sorted out. Atol protects air package holidays sold by travel businesses based in the UK.

Brown says: "It really is an issue with independent travellers who book their own travel, and mix and match flights to get the cheapest deals."

For those who miss a connection overseas, travel insurance can cover some or all of the additional costs that arise as a result, such as extra flight costs, accommodation, and food and drink, under the "missed connections" part of a policy.

Defaqto says this is a "relatively new" risk as a generation ago people tended to travel on package holidays. Even those taking a more traditional holiday, such as a cruise, safari or small group tour, could be at risk.

Holidaymakers who book their flights independently and miss the start of their cruise, safari or tour because of a delayed flight, may be left out of pocket if they don't have the right insurance cover - so if you have booked elements of your trip independently check you have the right cover.

POUNDNOTES

Financial fact: Gross mortgage lending totalled £268 billion last year, up 3% on 2017, according to figures from trade association UK Finance.

HALF OF CONSUMERS 'WON'T SHOP WITHOUT A DISCOUNT'

Only 30% of us are happy paying full price for items, with 50% saying they'd only buy certain products or services if there was a discount, according to TopCashback.co.uk.

Consumers typically hope to save around 25%, and TVs and sofas top the list of products sitting on shop shelves unless there is a deal, followed by tech items and holidays.

CHALLENGER BANKS' APPS TOP CONSUMER SURVEY

Challenger banks Monzo and Starling have come top in a consumer survey of banking apps - leaving the more established brands lagging behind.

MoneySavingExpert.com, which surveyed more than 5,000 people, said Monzo and Starling sailed ahead, with 78% and 70% of users respectively saying their apps had lots of features and great usability. Barclays was placed third, followed by Lloyds Bank, with NatWest in fifth place.

PLANS TO LIMIT 'EXCESSIVELY LONG' SPLIT MOBILE CONTRACTS

Mobile firms will be banned from tying customers into "excessively long" split contracts which link together their handset and their airtime for periods of more than two years, under proposals from Ofcom.

It said mobile customers are increasingly turning to split contracts - with separate contracts for the handset and airtime - to enable them to pay for an expensive mobile phone in instalments.

It has proposed a new rule to ban mobile operators from linking split contracts where the handset contract is longer than 24 months. The proposals, subject to consultation, could come into force next year.