Savers are keeping it in the family
- One in four are borrowing cash from their nearest and dearest
- The average amount lent adds up to nearly £1,100
- And only half always pay the money back
As everyone feels the January pinch on finances, new research from Charter Savings Bank1 reveals many will be relying on family and friends to tide them over. Its nationwide study found that one in four (25%) adults have borrowed from their loved ones in the past year.
The handouts from family and friends are not trivial – the average amount borrowed adds up to £1,093 in the past year. And the money is not always repaid – just 54% of those who borrow cash say they always pay it back.
A quarter (25%) of those who rely on others’ generosity try to pay it back most of the time and 10% say they occasionally pay it back, but 4% admit they never pay it back. Women are better than men at paying cash back – 58% say they always repay family handouts, compared with 49% of men.
Partners and spouses are the most likely to be asked for a loan – 22% of those who borrow say they ask their partner or spouse for cash at least once a month. Around 65% of those who borrow from their partner ask them for cash at least a couple of times a year.
Over a third (36%) of those who ask for money from friends and family borrow from their parents at least twice a year – and it is 18-34-year-olds who are most likely to borrow from them, with 11% saying they ask for money at least once a month.
The study found regional differences in the amount of savings borrowed from our nearest and dearest. Those in the South East are the most likely to borrow money – averaging £1,873 borrowed each year, with those in the East of England least likely to – averaging just £445 borrowed each year.
The research found that of all adults who have asked for money from family at some point – 30% have asked parents and 14% have asked partners or spouses, while a further 8% have asked friends.
Paul Whitlock, Executive Director, Charter Savings Bank, said: “The rising cost of living and squeezed family incomes, particularly at this time of year, can mean that many are increasingly leaning on friends and family to come to their financial rescue.
“In many cases our loved ones are happy to help-out financially, but that can come at a cost, particularly if the recipient isn’t able to pay it back.
“There are many different ways to save; even setting aside what may seem like an insignificant amount each month will see your savings pot grow. Starting a regular savings habit at the beginning of the year will set you in good stead to reach your savings goals for 2019 and leave you less reliant on raiding the savings of others.”
1Opinium conducted research among 2,007 adults living in the UK on behalf of Charter Savings Bank between 20th – 22nd November 2018
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Financial Services Compensation Scheme
Your eligible deposits held by a UK establishment of Charter Savings Bank are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK’s deposit protection scheme. Any deposits you hold above the limit are unlikely to be covered. Please click here for further information or visit www.fscs.org.uk.