For love or money?

More than 11 million Britons (23%) have lent a family member or friend money unexpectedly - with one in ten (11%) having done so in the past twelve months, according to figures released from Bright Grey's annual Financial Safety Net report.
 
The average amount people have loaned to family and friends in the past is £1,091, with the research also revealing that these types of requests for money are the most costly expense people have experienced.
 
While many people are providing financial support for family and friends, there are also a significant number (10%) who have not only loaned money but who have also had to borrow money themselves.  With one in five people (19%) admitting that they currently have no savings set aside should the worst happen, it is little wonder that many are reliant upon the kindness of loved ones for money during hard times.
 
Jennifer Gilchrist, senior product development manager, Bright Grey said: "The main problem with unexpected expenses is exactly that - they are unexpected.  As this research shows, many people have been called upon to provide financial assistance for their loved ones, yet one in ten (10%) has had to call upon the same form of support themselves.  While we all want to do the best we can for our family and friends, it is important that people make sure their own finances are in order before making a personal loan of this kind."
 
It seems that when financial hardship hits, people are far more likely to borrow more from an older family member (55+), with this group lending an average £900 more compared with those aged 18-34 in the last 12 months (£1,447 compared to £505). However, people may want to reconsider the stability of the bank of mum and dad as nearly one in 10 people (9%) aged over-55 revealed that they currently have no money set aside should an unexpected expense arise.
 
Jennifer Gilchrist, concluded: "It is sometimes easy to assume that loved ones will always be there for us to fall back on in times of financial need.  However, while they may be willing to help, they will no doubt have their own financial responsibilities to deal with.  These, combined with the high cost of living mean that although they might want to provide assistance they might not always be in a position to do so.
 
"Ensuring you have adequate protection or a financial buffer in place will help you to prepare for any unforeseen expenses you might encounter.  This sort of financial independence will not only enable you to meet the cost of these yourself, but may provide you with the opportunity to help out family or friends should they need it."