The study, published as part of the TUC's Age Immaterial investigation into women older than 50 in the workplace, showed that almost three out of five grandparents provided regular childcare, mainly so that the child's parents could work without having to pay costly nursery fees.
Although many grandparents play a key role in the care of their grandchildren, they are currently only entitled to take short periods of unpaid leave in an emergency.
The study of 4,000 grandparents and a similar number of parents found the level of unpaid, informal childcare was saving families thousands of pounds a year.
TUC general secretary Frances O'Grady said: "The informal childcare that millions of grandparents regularly provide is one of the most important and unheralded forms of care in Britain today.
"The childcare provided by grandparents allows mums and dads to work, saves them money on nursery and childminder fees, and creates a special bond across different generations in a family.
"It's important that public policy catches up with the needs of working grandparents and their families. A new right to unpaid leave would be a great way to get more working grandparents involved in childcare, and at very little cost to an employer."
