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Don’t lose out when lending money

Don’t lose out when lending money

Category: Banking

Updated: 15/08/2016
First Published: 15/08/2016

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This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Lending money to friends, family and even colleagues is a common occurrence for many people, but unfortunately, research from Paym shows that they often lose out as a result – don't be one of them!

The research found that 46% of respondents admit to rounding down when they lend money to friends and family, with the phrase "don't worry about the change" costing them an average of £65.80 per year.

It can be easy to overlook small amounts, and many do it for good reason, with 22% of lenders saying that the borrower not having the right change to pay them back was the main reason for accepting a rounded down IOU. A further 15% said they'd rather round down and receive some of the money than none at all. But as the figures show, these small gestures of goodwill can seriously add up over the year.

The same applies with lending money to colleagues. Additional figures show that the typical respondents will lend an average of £16.47 each year to workmates, with 36% saying that they feel "very comfortable" doing so. Getting paid back doesn't seem to be that simple in the workplace, either, only adding to the losses from such generosity.

However, those days could soon be at an end. The rise of mobile banking apps means that not having the right change looks set to become a less acceptable excuse – and with Paym, there's no need to even know the account details of the person being paid.

"Rounding down to let off friends and family for smaller amounts of change is fairly common behaviour, but our research shows it soon adds up," said Craig Tillotson, executive chairman of Paym. "With mobile banking more popular than ever, not having the right change doesn't really add up as an excuse – Paym lets you pay the exact amount straight back to friends and family's bank accounts using just their mobile number."

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