Grandparents spend on average more than eight hours a week looking after their grandchildren, according to the report from insurer Ageas, in partnership with the International Longevity Centre (ILC-UK).
The report estimates that nine million grandparents make up “the UK’s grandparent army” of childcarers, including 2.7 million who are heavily relied upon to regularly provide childcare.
It calculates grandparents save families around £1,786 in formal childcare costs per year, equating to a £16.1 billion saving across the UK.
The average figure is based on grandparents looking after one child in the family, so those looking after siblings could be saving families even more.
The research found two-thirds (65 per cent) of grandparents across the UK provide some form of childcare for their grandchildren, making it easier for parents to go out to work.
More than a quarter (29 per cent) of grandparents say their adult children have heavy workloads so need childcare support, and one fifth (18 per cent) say their children cannot afford formal childcare.
Two-thirds (68 per cent) of grandparents offer financial contributions to their grandchildren’s upbringing, such as payments towards clothes, toys and hobbies, leisure activities and pocket money.
Baroness Sally Greengross, president and chief executive of ILC-UK, said: “It is clear grandparents have become one of the biggest sources of childcare after parents themselves, allowing more parents to work and thereby reducing the costs of childcare.”
Recent research from Royal London suggested thousands of people who are helping to bring up their grandchildren could be missing out on valuable credits which would help to build up their pension.
More than 2,000 people were surveyed for the Ageas and ILC-UK report.