Grandparents are becoming one of the most important parts of the modern family, according to recent research.

Looking at how valuable are Grandparents, one of the UK’s leading insurance companies recently calculated that grandparents are providing £16.1 billion worth of free childcare each year.

The research suggests that over half of all grandparents look after grandchildren and help around the home, while parents are out at work – 99.5% without pay.

Helping the family economy
This allows parents to be economically active – which is valuable to many families and allows grandparents and grandchildren to benefit from greater interaction, especially as many older people have more time to spend with the young.

But with some saying that they feel guilty if they say “no” to providing childcare and having to cancel plans to do so, there is little doubt that the older generation is under pressure.

Risking loss of support
The fact is that older people, while they may enjoy having greater contact with grandchildren, are not always going to be there, especially if they wear themselves out acting as cooks, cleaners, gardeners and chauffeurs.

This raises an important issue about childcare in the absence of free family support.

Working age grandparents can receive donated child benefit credits

The fact is that those with young children can find it very difficult to manage without help.

Childcare is expensive and can make it unviable for a second parent to work, if the costs exceed a reasonable proportion of take-home pay. But if one parent stops working, income obviously drops.

Should one parent die or become ill, the position is even more difficult to cope with.

So is there a solution?

Family protection insurance
Fortunately, it is possible to arrange family income insurance that provides a regular income, should either parent die.

Lump sums can also be provided and both can be used to pay for the cost of childcare.

Has covid affected Insurance claims?

Health insurance
This can provide an income to cover essential expenses, including childcare, in the event of long-term illness.

Plans can cut in after four weeks of incapacity (longer if you want to keep premium costs down) and carry on until the individual gets better or reaches an agreed age (or dies).

This so-called “permanent health insurance” can replace typically between 50-70% of income but might be expensive in some cases.

Gearing it to the cost of childcare may be an option, although you should discuss with your independent financial adviser what level of cover is most appropriate in your circumstances.