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Bausparen or building savings?

Bausparen »  Bausparen or building savings?

To translate the term „bausparen“ into English may seem at the first view like an easy task. But comparing the classical continental bauspar system to traditional English building societies we will see substantial differences. Therefore, we prefer the terminology bausparen and bauspar system (building savings) and bausparkassen (building savings banks, building societies).

This distinction has gained in importance dramatically, especially after the financial crisis caused by some models of housing finance. Therefore, it is undesirable to link continental bausparkassen and building societies in Britain. Often you can encounter „the English expressions“ in older texts on our website with no need to differentiate.

British institutions have developed a different way due to government policy and they do not share some essential principles with continental bausparkassen. Both models were based on the same principles. But Great Britain gradually adjusted the system so that the traditional model of specialized institutions (building societies) has changed rather in the cooperative societies.

In contrast, the German bausparkassen still primarily provide long-term savings with the possibility to use the loan and to fund some essential life situations (housing, old age). The stability of that system is guaranteed by a robust client collective and near zero risk trade.

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