Bank of Mum and Dad rarely gets money back

IT seems the so-called Bank of Mum and Dad has become Britain’s most lenient lender, with parents giving children big loans that are never paid back.

A fifth of parents have taken money from their pension, or stopped contributing to it, to help their children financially.

But nearly six in ten of those who loaned money have written off all or some of the debt.

All the 1,057 parents in a survey by insurers Prudential had loaned money to their children or grandchildren – or planned to. But the Pru warned this generosity comes at a cost to their own financial futures, with parents eating into pension pots or making lifestyle cutbacks.

Ten per cent even admitted they had been short of money for emergencies. Just one in seven lent money with an agreement of fixed repayments.

Kirsty Anderson, from Prudential, said: ‘Whether helping with a deposit to buy a house or clearing student debt, the Bank of Mum and Dad plays a vital role. However, it is important that parents remember to consider their own futures when making loans.’