Across England, Wales and Scotland 14.4 million grandmothers and grandfathers have directly passed on £2.83 billion, according to new analysis from Partnership.
Some 64% have given cash directly to their grandchildren while 14% have given money to their own children to spend on these younger members of their family.
Andrew Megson, managing director of retirement at Partnership, said: "With many grandchildren eagerly debating how they will spend the money that their grandparents have given them for Christmas, it is interesting to note just how much financial support this generation provides.
"With the rising cost of living and an increasing number of households finding that their budgets are stretched, we anticipate that inter-generational giving will grow in the future."
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Arguably, the most generous grandparents live in the North West with 70% giving their grandchildren money directly and a further 14% providing their own children with cash to spend on their grandchildren.
However, those in Scotland did give the largest amount (£404) annually followed by those in the West Midlands (£395).
Some 11% provided cash to pay for education expenses, such as school fees, uniforms or extra activities.