A recent study has revealed an intriguing facet of the average Brit’s finances: debts owed to close acquaintances. Research conducted among 2,000 UK adults highlighted that, on average, individuals owe around £2,813 to their nearest and dearest. This total comprises funds borrowed for unexpected expenses such as home repairs, utility bills, and contributions towards unforeseen purchases like vehicles.
The survey found that more than half of respondents primarily turn to parental figures when financial support is needed, amassing an average debt of £2,103. Beyond parental assistance, individuals owe approximately £100 to friends, £165 to siblings, around £201 to other relatives, and roughly £67 to their partners.
Interestingly, these loans from friends and family constitute over 10% of the total debt carried by the average Brit, which currently averages at £18,814, excluding mortgage liabilities.
A spokesperson highlighted, “Debts, regardless of their origins, carry equal financial weight, whether they’re owed to financial institutions or loved ones. However, relying on personal loans, including those from close circles, can accumulate to a point where managing repayments becomes challenging month after month.”
The study also unveiled that nearly six in ten Brits have borrowed money from a friend or family member at some point, with over a third currently being indebted to them. Yet, settling these debts doesn’t always happen smoothly – one in ten individuals admitted to straining friendships due to disagreements over money owed, while one in twenty encountered strained family relationships for the same reason.
In addition to examining borrowing habits, the survey delved into the perspectives of lenders. On average, respondents revealed being owed around £435 each by friends and family members. Surprisingly, more than half of these lenders extended financial support acknowledging the likelihood of never reclaiming the loaned amount.
Overall, the study indicated that 74% of the money borrowed from loved ones gets repaid, while the remaining sum is often deemed irrecoverable. Intriguingly, 55% of Brits expressed regret over lending money and would hesitate to do so again, despite 41% admitting they would consider lending over £10 without expecting it back.
Among the common reasons for seeking financial aid from friends or family were unexpected expenses such as home appliance breakdowns, vehicle purchases, or holiday expenses.
When considering the breakdown of debts owed to various individuals within one’s social circle, the figures are revealing:
- Partners: £67.08
- Children: £27.50
- Friends: £99.84
- Siblings: £164.56
- Other family members: £201.72
- Colleagues: £18.79
- Parental figures: £2,103.32
- Others: £130.90
Total Debt Owed: £2813.71
This intricate network of financial transactions within personal circles underscores the complexities and challenges associated with borrowing from loved ones. While it provides a safety net during unforeseen financial hurdles, it also poses potential risks to relationships and personal finances.
As these borrowing patterns persist, the discussion around responsible borrowing and assessing financial capacities before extending or seeking loans gains even more significance in the British financial landscape.