Starting university is a significant milestone for young adults and their families, including grandparents.

Grandparents often play a crucial role in supporting their grandchildren during this phase of their lives through emotional support and advice on navigating challenges, as well as the financial challenges that come with attending university.

Bank of Grandparents

Grandparents often contribute financially to help alleviate the burden of university costs. A grandparent can gift their grandchild up to £3,000 per tax year and it will be exempt from Inheritance Tax.

Our research  found that a significant 81% of those who supported their family financially didn’t expect repayment. While each family's financial situation differs, contributions can take various forms, such as:

• Tuition fees - The maximum annual tuition fee in England is £9,250 and to help keep student loan costs down for your grandchild you may choose to help cover part or all of their tuition fees.
• Living expenses - According to Save the Student, the average rent for student accommodation is £535 per month and energy bills average £85 per month.
• Pocket money - Organising a regular wallet top-up can be useful to your cash-strapped grandchild.
• Set up a savings account - Grandparents can help their grandchildren set up a savings account and encourage them to start saving early. Teaching the benefits of an ISA, for example, is a great way to start.

A survey found that 51% of grandparents valued ‘manners and politeness’ as the greatest life lessons to pass on to younger generations, with ‘money-saving and financial advice’ second in the ranking at 30%.

As a grandparent, offering financial advice to your grandchild going to university is valuable, and sharing tips to help them manage their finances responsibly will help make the most of their experience. Here are some key financial tips to pass on.

• Budgeting - Help your grandchild create a budget that accounts for income and all necessary expenses. It’s important to highlight the significance of living within their means and to track spending to avoid financial stress. If your grandchild plans to use a credit card, advise them to use it responsibly, and speak to them about high-interest charges and potential debt traps.
• Student discounts - Remind your grandchild to take advantage of student discounts offered by various retailers, restaurants, and services. Many establishments provide special deals to students, which can help stretch their pennies further.
• Part-time employment - Balancing part-time work with studies can be challenging, but it can also teach essential time management and responsibility. This experience will help them develop valuable work skills and earn extra money.
• Student support and guidance – Encourage your grandchild to look into financial support for students, such as scholarships, grants, and bursaries. UCAS  has a useful webpage with more information on this.

By setting a strong foundation for money management, your grandchildren can focus on their studies and enjoy their time at university without unnecessary financial stress. Your guidance and wisdom will leave a positive impact on their financial well-being for years to come.

Visit our Savings Help Centre for more useful information, help or support.