UK adults forced to borrow money from family members

More than one in four (28%) UK adults have been forced to borrow money from family members, according to new research. With the average amount borrowed by individuals standing at £2,123, the collective family lending economy is now worth around £31billion. Family Generations & Financial Pressures is the title of the new report from Scottish Widows think tank Centre for the Modern Family and shows that 23% of family borrowers need this support just to cover day-to-day household costs.


In addition to borrowing from family members, more than a quarter (26%) of people have raided their savings in order to cope with higher living costs, and the same percentage has cut back on saving for the future. Showing no improvement on 2012 levels, almost one in ten (8%) people were found to be skipping meals just to keep on top of household costs. The same number were also selling valuables in order to get by.

Rising household costs

Identifying eight different generations* within the modern family, the report finds that rising household costs are still the biggest and most immediate pinch point for UK families across the generational spectrum, according to 41% of adults, overtaking long-term goals such as mortgage repayments (26%) or paying off debt (10%).

Of the family generations, grandparents and parents of children under 18 are the groups being isproportionately squeezed. One in three grandparents who are providing childcare for family members has spent their savings to keep up with day-to-day spending. A third of parents with children under 18 have had to cut down on vital living costs, such as groceries, to cover household spending, compared to one in four overall. Meanwhile, one in five parents of children under 18 has taken out a loan, spent on credit cards and gone overdrawn – double the average of one in ten for the total population.

Boomerang kids

The report finds that the generations are pulling together to help each other out financially in the post-recessionary climate. Parents and grandparents were found to be the most generous lenders, with 39% of parents with adult children living at home and 36% of empty nesters having lent to their children. More than a third (37%) of grandparent child carers have also lent money to their children.

Single renters are the most likely to have borrowed from the Bank of Mum and Dad, with 43% having done so. This is compared to just over one in four (27%) ‘boomerang kids’ – adults under the age of 34 living back at home with their parents.

Despite high levels of intergenerational lending and borrowing, only one in ten family lenders said that they resented having to lend money to family members, with over half (55%) saying they were pleased to do it. This rises to 63% among parents with adult children still living at home. One in four family lenders never expect to get back the money they have loaned, and one in five family carers and grandparents say they expected to have to lend money to family members and budgeted accordingly.

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*For the purposes of this research, the Centre for the Modern Family identified eight generation groups that exist in the modern family today:

1) Individuals living with friends in rented accommodation

2) Under-34s living at home with parents

3) Co-habiting/married couples without children

4) Parents with children under 18

5) Parents with grown-up children (over 18) who are still at home (full nesters)

6) Parents with grown-up children (over 18) who have left home (none still at home) (empty nesters)

7) Grandparents providing childcare for family members (grandchildren or otherwise)

8) Providing regular care and support for a relative

The research was completed by YouGov, and the findings are based on 2,082 online interviews with a nationally representative sample of adults aged 18 and over living in the UK. The interviews were conducted between 28 April and 1 May 2014.