Pension withdrawals by those aged 76 and over have increased from £158.7m in 2017/18 to £247.5m, a 56 per cent increase, research from Salisbury House Wealth (SHW) has revealed.

The increase has been attributed to a rise in lending to grandchildren by the 'Bank of Gran and Grandad', with over 27,200 home purchases supported by grandparents last year, according to Legal & General research.

SHW highlighted that historically, pension withdrawals have slowed at this age, with pensioners withdrawing higher amounts early on in their pension to fund post-retirement travelling and holidaymaking.

However, this trend seems to be shifting, with the amount withdrawn from pensions by those aged 76 and over, more than quadrupling over the last five years, rising from £56m in 2014/15.

Furthermore, while the amount withdrawn by people aged 76 and over more than doubled in the last year, the amount withdrawn by those aged 66-75 has increased by just 6 per cent (rising from £2.1bn in 2017/18 to £2.2bn last year).

Commenting on the findings, SHW managing director, Tim Holmes, said: “A growing number of grandparents are using their pensions to help the next generation get onto the property ladder.”

“Pension savings are now seen as funds for more than just current expenditure by retirees. The Bank of Gran and Grandad are an increasingly important source of funding for home purchases alongside the Bank of Mum and Dad.”

“House deposits have reached unmanageable levels for some young people. Most purchases require a minimum 5 per cent deposit, which is roughly £10,000 based on average UK house prices.”

“The trend towards using savings for more than just current expenditure further highlights the importance of building up a decent cash buffer. The best way to do this is plan well in advance and factor in the possibility of providing financial assistance for house purchases.”

“Rising life expectancies means pension pots already have to stretch further than may have been anticipated. It is important to seek advice before withdrawing and spending your savings as you can only spend it once and when its gone it’s difficult for retiree’s to replace.”

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