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As students prepare to receive their A-level results, Rathbones, one of the UK's leading wealth and asset management groups, warns that access to higher educational opportunities increasingly depends on family wealth.
Over a thousand parents and grandparents who currently contribute, or expect to contribute, towards education costs were contacted for a study commissioned by Rathbones. This found that more than eight in ten (81%) believe rising education costs are making life chances increasingly dependent on the financial resources available within a family.
Against this backdrop, nearly two-thirds (65%) say grandparents contribute, or are expected to contribute, towards education costs, highlighting the growing role of the "Bank of Grandma and Grandad" as rising university costs place increasing pressure on parents.
One in five (20%) grandparents who provide support say they cover most or all university costs, including 7% who fund virtually the entire expense of higher education. Meanwhile, almost six in ten (59%) say family support is combined with student borrowing, either through modest contributions (31%) or a roughly even split between loans and family funding (28%).
The findings come after the Department for Education confirmed updated student loan interest rates for the 2026/27 academic year, with some undergraduate and postgraduate borrowers continuing to face interest charges of up to 6%, bringing the long-term cost of higher education back into sharp focus for prospective students and their families.
Malvee Vaja, Chartered Financial Planner at Rathbones, says: "Receiving good A-level results should open doors, but the reality is that going to university often comes with a significant financial commitment. The Bank of Mum and Dad has long helped young people navigate these costs, but we are increasingly seeing the Bank of Grandma and Grandad play an important role in funding educational opportunities.
"The Bank of Grandma and Grandad is no longer just helping younger generations onto the property ladder. Increasingly, it is helping fund education too. Many grandparents tell us they would rather provide support when the impact is immediate and visible than leave a larger inheritance later."
Education funding increasingly linked to estate planning
Grandparents' support takes many forms. More than a third provide cash gifts directly to grandchildren (37%) or parents (36%), while 34% make direct payments to schools or universities. A similar proportion (34%) have savings or investments set aside specifically to support education costs.
The research suggests grandparents' support is driven by more than a desire to help younger generations succeed.
More than two-thirds (69%) say inheritance tax considerations influence decisions around education funding, including a quarter (25%) who describe tax planning as a major factor. Meanwhile, 31% believe educational gifts should be viewed both as a way of supporting family today and as part of a wider estate planning strategy.
The findings come ahead of planned changes that will bring unused pension wealth into inheritance tax calculations from April 2027, prompting many families to reassess how and when they pass wealth to future generations.
Indeed, 67% say the forthcoming changes increase their desire to help fund education costs during their lifetime rather than leave money as part of their estate.
Malvee Vaja adds: "For many grandparents, helping with education can achieve two objectives at once: supporting children and grandchildren at a crucial stage of life while potentially forming part of a broader intergenerational wealth transfer strategy.
"However, there is also a wider societal question. Families with accumulated wealth across generations are often better placed to absorb rising education costs than those without those resources. As education becomes more expensive, there is a risk that opportunities become increasingly linked to family wealth rather than ability and ambition alone."
The findings build on previous Rathbones analysis, which found many parents expect to make substantial financial commitments to support their children through university.
More than a quarter (26%) of parents who currently contribute, or expect to contribute, towards university costs anticipate providing more than £50,000 per child. The analysis also found that some families expect to borrow, rely on financial support from wider family members, or even sell assets to help fund higher education.
