Baby Boomers, who predominantly make up the current generation of grandparents, are having significant impacts on the economic landscape, showcasing their pivotal role in wealth transfers as they actively contribute to and shape the financial dynamics over the years ahead.
The proportion of national population to proportion of national wealth across the generations highlights a significant influence on the Australian economy.
Baby Boomers make up just 21% of the population but hold almost half (48%) of the private national wealth.
Over the next two decades, we anticipate that $6.2 trillion of wealth will be transferred to younger generations.
As a result, the Grandparent economy is rising, facilitating wealth and contributing to the financial wellbeing of younger generations.
Grandparent support
Grandparents play a pivotal role in the lives of their children and grandchildren.
Two in five (39%) Australians receive some sort of help from their grandparents.
Financial inheritance is the top item Australians receive from their grandparents (13%), followed by living with them rent free or reduced rent (11%) and looking after their children to minimise childcare costs (11%).
Others receive financial support for bills (11%) and financial support for education (9%).
In fact, when Gen Z are compared to Baby Boomers and the help they have received help from their grandparents, it highlights a significant difference.
Almost one in five Gen Z (17%) have received financial support from their grandparents for education, 8.5x more than Baby Boomers and 12% Gen Z have received financial support to buy a home, 6x more than Baby Boomers.
One in five Gen Z (20%) have lived with their grandparents for free or reduced rent (4x more than Baby Boomers) and 16% have received financial support for overseas travel (16x more than Baby Boomers).
When Grandparents were asked about the top concerns they have for their children’s future, 77% indicated the rising cost of living, 72% rising cost of housing and 42% economic downturn. (McCrindle and Futurity – Grandparents’ contribution to education report 2023)
One in three Grandparents (32%) intend to pass on 50% or more of their wealth directly to their grandchildren.
As the current generation of grandparents continue to live longer and remain active well into their later years, their investments in properties and superannuation funds become pivotal components of the broader economic landscape.
This trend signifies a notable shift in the traditional roles of grandparents, who are now not just recipients of support but active participants and contributors to the evolving economic dynamics, embodying the essence of the new investor in the financial landscape in the years to come.
