Borrowing from family and friends ‘putting a strain on relationships’

As money becomes tighter borrowing between family members and friends has become more common.

However, under half of people who loan out money to t…

As money becomes tighter borrowing between family members and friends has become more common.

However, under half of people who loan out money to their family or friends say they are usually paid back on time and in full, according to new research from Think Money.

As a result of this, millions of relationships have suffered as families begin to argue over finances and debt.

Nearly 19 million people (37 per cent) have lent money to people over the last year, averaging £1,250 each. Some 15 per cent of those lenders, totalling almost three million people, said doing so has damaged their relationship.

Almost nine million individuals (47 per cent )said that when they lent money to others it was usually repaid in full and on time. However, five million (27 per cent) said they received it back slower than was first agreed, while four million (22 per cent) only managed to get some of it back – or none at all.

It is younger people who are more likely to need to borrow money, potentially because of the large costs of moving out of home or going to university. Some 34 per cent of 18-34 year olds had borrowed money in the last year compared to just six per cent of individuals aged of 55.

However, youngsters were also more likely to lend money, with 41 per cent claiming they had given money to people in the last year.

Older people did tend to entrust larger amounts of money, with seven per cent of over-55s offering over £7,500 and three per cent giving more than £10,000.

In comparison only one per cent of 18-34 year-olds had lent out over £7,500 – and none had gone over £10,000.

The report was commissioned to coincide with Shakespeare Day on 23rd April.

Ian Williams of think Money said: "Human nature doesn't change. It's been over 400 years since William Shakespeare's warning about lending to friends, but it's as true today as it was back then."

By James Francis

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