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Do you borrow money from family?

Do you borrow money from family?

Category: Money

Updated: 19/08/2014
First Published: 19/08/2014

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 It is now over 6 months old so the content may be out of date.

It can't be denied that it's often difficult to balance the books. Even with the drop in inflation announced this morning, stagnant wage growth and rising prices mean many of us don't have a lot left over after those essential bills – so some turn to family members for help.

According to research from Scottish Widows, 28% of UK adults have been forced to borrow money from family members, typically to the tune of £2,123. Higher living costs are largely to blame: 23% of those who borrow money from family do so just to cover day-to-day household costs, with this input providing valuable – and often vital – support.

Parents and grandparents were found to be the most generous lenders. Some 39% of parents with adult children living at home had lent them money, a similar amount to those who lent to children who had flown the nest (36%), while 37% of grandparents had also lent money to their children. Happily, however, it seems that the majority don't resent providing that kind of financial support, with 55% saying they were pleased to do it and a further one-in-four never expecting to get the money back.

While we'd all like to comfortably cover the bills ourselves, there could well come a time when things get a bit too much. In those cases it's nice to know that family members won't resent offering the kind of financial support necessary, and with additional research from MGM Advantage highlighting how much budgets are becoming stretched, turning to family could become a more widespread occurrence.

The figures show that, thanks to the effects of inflation, a typical household will need to spend an extra £406 a year to maintain their standard of living compared with a year ago. That means it could be even harder for a lot of people to make ends meet, and could potentially put an even bigger strain on the household budget.

But what if your family can't offer that kind of help? It's a definite possibility, and some people find themselves making significant sacrifices to make ends meet.

Additional figures from the Scottish Widows report show that 26% of people have raided their savings in order to cope with higher living costs, and the same proportion had to cut back on saving for the future. A particularly strapped 8% of those surveyed actually had to skip meals just to keep on top of household costs, and the same amount resorted to selling valuables to get by.

Hopefully you won't need to resort to such measures, and finding you need to skip meals should send alarm bells ringing. Ideally you'll have built up an emergency fund for these kinds of situations, but if not, then now's the time to start – you never know when you could benefit from a cash injection, and even if you can't set aside much, small amounts can still add up.

What next?

Open a savings account.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.