A Cambridge-based think tank says it wants to see social housing organisations encouraged to build more multi-generational homes and a relaxation in planning laws for those who want to build or convert their own house.

The Relationships Foundation said increased life expectancy, falling pension funds, rising childcare costs and a stagnant housing market had led to an increase in the number of multi-generational homes.

The Foundation said grandparents could help take care of grandchildren, while children could in turn help to keep an eye on grandparents. It added that bringing older and younger generations together in one house would save parents travel time and worry as they try to juggle two sets of care responsibilities.

Researcher at the Relationships Foundation, Peter Lynas called for tax incentives and a relaxation to planning regulations to enable more families to make space in their homes for older relative.

"As we celebrate National Family Week, we are encouraging more people to consider bringing their extended family under one roof. Multi-generational living allows families to help each other out and prevents loneliness. It is not for everyone, but we must make it easier for those who want to do it,” he said.

Pensioners now outnumber children for the first time in the UK as more and more people live longer. Recent research by Lloyds TSB Insurance found that 500,000 homes in Britain are occupied by several generations.

The Relationships Foundation said multigenerational living could have a very positive effect on family cohesion but applies at present to only two per cent of homes in the UK.

"Multi-generational living to set to increase as house-building slows, and the sandwich generation grows,” he said. “It is much easier to care for those you are (physically) close to. We now live in long ‘beanpole’ families with more vertical than horizontal links, so intergenerational bonds are becoming more important.”