News Column

It's Official: The Biggest Bank in Britain is Now the Bank of Granny and Grandpa

July 31, 2014

LONDON, July 31, 2014 /PRNewswire/ --

Since the recession and the banking crisis in 2008, many young people have come to rely on the Bank of Mum and Dad that is now increasingly financially - stretched with incomes failing to keep up with inflation, soaring house prices, energy and food costs.

The reality is that Mum and Dad are being squeezed.

But there's a new lender not far away - The Bank of Granny and Grandpa. Grandparents now fund one in four private school pupils[1] and a recent poll found that Grandparents give a total of GBP2.8 billion a year[2] in cash to their grandchildren. In addition to financial help, Grandparents already provide as much as 35% of all childcare for families with working Mums[3].

Following the May publication of the Wealth and Assets Survey by the Office of National Statistics [ONS][4] and research conducted by Kevin Butler, formerly of the Bank of England, and Economics Adviser to WPA - the Medical Insurer - the total assets of 'Granny and Grandpa' place them as the biggest bank in the UK - the Bank of Mum and Dad has been relegated while the 'big banks' are getting smaller[5].

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If Granny and Grandpa were a formal bank, their assets would outstrip the UK's biggest bank by over GBP1 trillion (see above link). Grandparents are asset rich, both by way of pensions and property values, whereas parents suffer from increasingly strained cash-flows.

Kevin Butler says: "These ONS verified figures are marking a societal shift away from a reliance on banks, as well as Mum and Dad. Banks are, of course very important as lenders but they need to make money and reward shareholders, whereas grandparents are wanting to use their assets effectively before inheritance tax nearly halves their lifetime savings."

He continues, "These are not small numbers, indeed nearly half of all households with occupants over the age of 55 have net assets of GBP500,000 or more."

Grandparents are now becoming the lender and grant-giver of choice.


1) 'Grandparents help pay for one in four private school pupils'. MailOnline 28 August 2013 2) 'Bank of granny and grandpa donates GBP2.8bn' The Times 1 January 2014 3) Grandparents providing childcare - Briefing Paper The Childhood Wellbeing Research CentreNovember 2011 4) Office of National Statistics [ONS] Wealth and Assets Survey (published May 2014) 5) Extracted from Banks' Annual accounts:

2013 (assets - GBP billions) 2012 (assets - GBP billions) Nationwide 191 196 Lloyds Group 847 934 RBS 1028 1312 Barclays 1312 1488 HSBC 1618 1662 Bank of Mum and Dad 1716 Bank of Granny and Grandpa 2717

For more information:

Kevin Butler - or Telephone: +44(0)7809-670-985

Kevin Butler had a 33 year career at the Bank of England from 1977 to 2010 culminating in the role of Southwest Regional Agent. He holds the Economics Advisory Portfolio at WPA (Western Provident Association Ltd.), is the Consultant Economist to Milsted Langdon Chartered Accountants and is a frequent television and radio news bulletin commentator in the South West.


Charlie MacEwan -

Telephone: +44(0)7771-808083


Office of Kevin Butler and WPA

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Source: PR Newswire Europe

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