Borrowing and lending money between friends and family has plummeted in the past year, falling even further following the coronavirus lockdown.
There has been a 58% reduction in borrowing, and a 52% decrease in lending, since March 2019, according to the latest ‘How Britain Lives’ research from Lloyds Bank.
Borrowing significant sums of money from loved ones decreased by 29% in the year to March 2020, and then by a further 40% throughout lockdown.
Just 13% of Brits have borrowed money from friends or family in the last year, compared to 31% in March 2019.
Lending has seen a similar decline with a 28% reduction in the loaning of money to loved ones between March 2019 and March 2020. Lending went down by a further 34% over the lockdown period.
The number of people lending money to friends and family has more than halved in the last year, falling to 19% from 40% in March 2019.
The main reason for borrowing money from friends or family was to pay off other debts, with 16% of people citing this as the reason.
Buying a car was the second most common reason for borrowing (14%) and the biggest loans from family and friends in the past year were for cars, with the average loan standing at £3,630.
People also borrowed substantial sums to pay for weddings, borrowing an average £3,226.
Some 12% of people called on loved ones for extra cash to make home improvements, at an average of £2,846.
The average amount borrowed for debt consolidation was £2,563.
Family and friends who have been lending money are much less likely to be happy about doing so, with just 51% saying they were pleased to be able to help someone out, compared to 61% in 2019, and fewer people expect to be paid back than in 2019 — 42% compared to 43%.
Those aged between 18 and 24 are the most likely to lean on friends and family for extra cash, but borrowing amongst this group has dropped from over half (51%), to one in three (30%). Across all age groups there has been a significant drop in people turning to loved ones for financial aid.
Those in Wales are the least likely to borrow money from loved ones, with only 5% saying they have done so in the last year, an 83% reduction since 2019. The regions seeing the most borrowing from friends and family are the South West, and the North West, where 15% continue to lean on loved ones for financial support.