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  • Following the Bank of England’s decision to raise the Bank Rate by 0.15% to 0.25% in December 2021, Windfall Bond and Tracker Savings Bond rates increased by 0.15% from 1 January 2022. Tracker mortgages changed from 25 January and we have written to customers individually with revised payment details where the new rate exceeds the minimum rate (or ‘floor’) already applying to their mortgage. We will be considering our other savings and our variable mortgage rates after the Bank of England MPC meeting on 3 February. (Notice updated 19/01/22)

  • Please note that the Premium Saver (5) has now been withdrawn from sale. 
    If you have opened an account, you may add funds until 3pm, 7 February 2022, after this no additions will be allowed.

Our Bank of Mum and Dad research

The Bank of Mum and Dad - how does it really work?

In 2018, in conjunction with the London School of Economics, we carried out research with our members to look at how families approach parental help when buying a property, and their experiences during this process.

The report, The Bank of Mum and Dad: How it really works, confirmed what we suspected which is that, while parents are happy to help their children, there is rarely any discussion about how any money should change hands or be repaid.

The report recommends that a set of guidelines or a template be developed to help ensure parents and adult children have discussed exactly what they are doing and what everyone’s responsibilities are regarding when, how and indeed if repayments are to be made.


What we found out

The report provided interesting insight into how the Bank of Mum and Dad really works, such as:

  • Few parents (and indeed grandparents) take legal or financial advice before lending money to their loved one. There is usually no written record of transactions.

  • Only 8% of parents who gave money to a child for a deposit sought advice from a financial adviser, while only 14% took legal advice.

  • Families are failing to make clear whether the money is a loan or a gift.

  • Many people are uncomfortable talking about money within the family.

  • Most parents said they were pleased to be able to help their children, although about half thought it unfair that they should have to do so.

  • The most popular source of funds for family assistance was savings (70%), followed by inheritance, chosen by 14%.

  • The median parental contribution was £30,000, while the mean was much higher at £59,200 in the higher-cost areas of London and the South East.

To find out more read our report The Bank of Mum and Dad: How it really works.

 

How to run the Bank of Mum and Dad

Having talked to our members about their experiences and the report’s recommendation regarding guidelines, we produced a definitive guide on 'How to run the Bank of Mum and Dad'.

Our guide shows how it works and the important things families need to consider, covering topics such as:

  • Fairness
  • Misunderstandings and misgivings
  • Taking advice
  • Having more than one child
  • Relationship breakdowns
  • Personal circumstances and what the future holds.

For more information read our guide 'How to run the Bank of Mum and Dad'.

How to run the Bank of Mum and Dad

Our definitive guide on 'How to run the Bank of Mum and Dad' shows how it works and important things to consider.

Legal and Financial consideration guide

Useful guidance on the financial considerations and legal implications that families should be aware of when helping loved ones to buy a home.

Conversation guide

Talking about money with family can be difficult. Our simple guide can help both parents and adult children tackle that tricky conversation of financial support.