Media Release

Press Release: ‘Bank of mum and dad’ a vital backstop for low-income families, new research reveals

The ‘bank of mum and dad’ is a crucial source of welfare for people on low incomes and those not able to access it are at greater risk of isolation and poverty, a think tank reveals today. In a major new study, Family Fortunes: The bank of mum and dad in low-income families, looking at the extent of intergenerational support in low-income families, the Social Market Foundation calls on Government to do more to facilitate such family-based welfare.

The SMF’s study, Family Fortunes, draws on a new poll showing that 52% of people on low incomes who answered said they had received financial support as an adult from a parent. Over two-thirds agreed that people tend to struggle when they don’t receive financial or practical support from their parents and 23% said that they would not be able to survive without the support of their donor.

The report’s author, Ryan Shorthouse, said: 

We tend to think of the ‘bank of mum and dad’ as being about better-off families helping their children get on the housing ladder or pay for a wedding. But our research reveals that about half of families on low incomes receive regular financial and practical support, typically helping them to pay for everyday items, keep out of debt and make ends meet.

The impact of such transfers is generally very positive, both for the donor and recipient. But not receiving support from the wider family can cause deprivation and isolation. When thinking about poverty, policymakers need to be more aware of this.

Informed by in-depth interviews about people’s experience of giving and receiving support from family, Family Fortunes proposes nine practical policies to help people on low incomes support each other across generations.  These include making any new poverty indicators account for the level of familial support received, introducing Government-backed tax-efficient Family Trust Funds to help family members across generations, and enabling grandparents to claim unpaid leave to look after their grandchildren.

The SMF’s ‘Family Trust Fund’ idea would allow different generations of a family to invest in a tax-efficient trust managed by a representative from each household. Decisions on distribution would be determined by the trustees, and families would be prompted to enrol on receipt of Child Benefit.

Ryan Shorthouse continued:

With the recovery slow and public spending still under pressure, policymakers shouldn’t solely focus on wages and benefits to boost living standards and reduce poverty. Family is a vital backstop for people on low-incomes, and practical measures like a government-backed trust fund could make a real difference. 

It’s time for policymakers to be more creative and look at ways to enable people to untap the resources of their wider family.

Notes to Editors

  • According to the SMF’s poll, of those who gave an answer:
    • A majority (52%) of people on low incomes said they had received financial support as an adult from a parent, compared to 55% of respondents across all income groups;
    • Almost three-quarters (73%) of those on low incomes had received financial support of £2,000 or less in the past five years, although 6% had received £10,000 or more;
    • Almost one in four (23%) of low income households reported that “I wouldn’t be able to survive without their [the donor’s] support”;
    • Almost one in four had received financial support of £2,000 or less in the past five years and 6% had received £10,000 or more;
    • 78% of low income donors reported that giving was a positive experience, bringing them a lot of happiness (45%) or bringing their family closer together (33%);
    • 69% of people on low incomes agree that people tend to struggle when they don’t receive financial or practical support from their parents.
  • The poll was designed and undertaken by SMF and ComRes to quantify the prevalence of intergenerational transfers and uncover attitudes towards such support, especially among low income households who were defined in this case as having a household income of £20,000 or below. ComRes interviewed 2,055 BG adults online between 14th and 16th June 2013. ComRes also interviewed over the telephone 510 British Adults with a combined annual household income of £20,000 and below between 17th June and 8th July 2013. Full data tables are avaliable at
  • In addition to the poll Family Fortunes contains a number of new analyses of data concerning intergenerational transfers. These include:
    • An analysis of national household level surveys to assess the prevalence, distribution, scale and nature of financial transfers and in-kind support;
    • Depth interviews with 30 low income households, defined in this case as households whose net income is below 60% of equivalised median household income;
    • A comprehensive analysis of secondary evidence from the UK, Europe and the US.
  • The Social Market Foundation (SMF) is a leading UK think tank, named 2012 UK Think Tank of The Year. The SMF develops innovative ideas across a broad range of economic and social policy, champions policy ideas which marry markets with social justice and takes a pro-market rather than free-market approach.


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