Britons count 26bn annual cost of generosity to loved ones

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The Independent Online

We lent friends and family 26bn in 2007, a study has shown.

Around 29 million Britons have lent other people money over the past 12 months, and are owed almost 900 each on average, claims the online payment provider PayPal, which reports that only half of those who advance money always ensure they get it back in full.

PayPal's researchers calculate that a total of 14bn has been lent to family members this year, but just 6m to best friends. (The remainder of the lending was to other friends and acquaintances.) And when we need to borrow, the majority of us turn first to our parents for help, with 16 per cent of people surveyed in debt to their mother, the most likely family member to offer a loan. Just 9 per cent owed money to their father.

The research also revealed that lending can cause tension within families. Around 16 per cent of those interviewed admitted they had fallen out with family members as a result of having lent money to them, and in a third of cases, the rift had yet to heal.

Cristina Hoole, a spokeswoman for PayPal, said that loans of this type were often given on the spur of the moment and involved only small amounts of cash. "However, these can soon add up. With Christmas just round the corner, perhaps we should be looking to call in some of those unpaid loans rather than relying on credit to see us through.

"Agreeing upfront with your friends or family when you might expect to get your money back could save a lot of hurt further down the line."

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