Research: Older people using savings accounts for grandchildren

Many grandparents are storing away cash for their grandchildren, it has been revealed.

New research has shown that many older people in the UK are putting money in savings accounts such as ISAs or fixed rate bonds for their grandchildren.

According to a study conducted by the Cheltenham & Gloucester building society, these so-called "silver savers" store away an average of £1,000 every year for their young relations in order to provide them with a nest egg of savings at some point during their lives.

The financier found that 33 per cent of grandparents are saving for their grandchildren, with 27 per cent starting to do so as soon as the child is born. Meanwhile, 45 per cent of those who do save indicated their wish for this money to be used to meet educational costs, such as university fees.

Meanwhile, Mark Bower, managing director of Money Maxim, said recently that financial pressure on families is likely to continue growing in 2011 following the recession.

Meanwhile, one lender has added to its range of fixed bonds products.

Consumers wishing to compare savings on the most competitive fixed bonds packages available in the UK may like to consider a new product being launched by one financier.

In news which may be of note to those who already have Yorkshire Building Society fixed rate bonds, the lender announced earlier this week (January 26th 2011) that it is to add to its range of such accounts with a three-year package that has an annual equivalent rate of 4.15 per cent.

Additionally, the interest on the deal can be taken monthly should the individual wish, meaning that the package gives increased levels of flexibility to customers.

Mike Helliwell, savings product manager at Yorkshire Building Society, commented: "This bond offers a competitive rate that will give new and existing customers an excellent return on their investment."

This comes after Leeds Building Society announced it has created a new 18-month fixed bonds package with a rate of 3.15 per cent.