More than one in four adults has been forced to borrow money from family members. And it’s not just a matter of a few quid: new research published today suggests the average amount lent to parents, siblings and children is £2,123.
If true, it means the UK’s collective family lending economy is now worth around £31billion. But the figures also reveal the growing pressure on struggling folk with one in four family borrowers saying they need the family support just to cover day-to-day household costs. One in 10 actually said they have been skipping meals or selling valuables just to get by.
The report also revealed that that rising household costs are still the biggest and most immediate pinch point for UK families across the generational spectrum, ahead of long-term goals such as mortgage repayments or paying off debt.
Indeed the costs of running a family are bearing down hard on some. For instance one in five parents of children under 18 has taken out a loan, spent on credit cards and gone overdrawn. That’s, double the average of one in ten for the total population.
Meanwhile one in three grandparents who provide childcare for family members has spent their savings to keep up with day-to-day spending.
“With household costs hitting certain family generations hard, is there scope for benefits reform to provide further support for working families struggling with household bills?” asked Carolyn Fairbairn, chair of the Centre for the Modern Family, the Scottish Widows’ think tank behind the report.
She also called on financial service companies to help families. “We know that the family lending economy is worth over £30billion and so should the industry be doing more to develop innovative products which allow families as a whole to contribute to, such as mortgages and ISAs?”