Summer socialising leads to £148 million in unpaid IOUs
A third (34%) of young people expect to be out of pocket by an average of £64 each over the summer due to lending money to friends who don’t pay them back. This means that today’s 18 to 25-year-olds owe each other a total of £148 million for summer socialising – equivalent to selling out Glastonbury Festival six times.
Research released from Paym, the secure way to pay back friends and family using just a mobile number, reveals that 71% of young people acknowledge lending and borrowing money between friends can cause friction in their relationships.
Over the summer 18 to 25-year-olds expect to spend an average of £38 a week on socialising and leisure activities. However more money is lent over and above this:
92% will lend to close friends, with IOUs worth £26 on average per loan
80% lend to their partner or spouse, and these are the most costly, averaging £43 each time
74% will lend to housemates, covering £20 on average per loan.
Summer socialising increases the likelihood of both lending and borrowing amongst friends as 41% of 18 to 25-year-olds surveyed use loans from friends and family. Despite these IOUs being commonplace, they don’t appear to create financial dependencies - only 4% say they actually rely on borrowing from friends to finance their summer plans.
The majority of 18 to 25 year olds (56%) pay their own way for summer fun out of savings and a further 36% use earnings from a summer job. In contrast 16% rely on their parents to get them through the summer. When it comes to paying back their summer IOUs 44% of 18 to 25-year-olds rely on technology using online or mobile banking and mobile payments services.
The ways in which these small informal loans are used demonstrates how important the leisure economy is to young people and how they prioritise their spending on social situations and having fun. The top five situations are:
1. A drink in a pub, bar or club (38%)
2. Lunch or dinner (29%)
3. A small meal e.g. sandwich (26%)
4. Cinema, theatre, concert or event tickets (22%)
5. A drink in a café (21%)
Only 14% will borrow money to help cover a household cost, such as rent or food, suggesting that young people ensure they have the important things covered.
Jemma Smith, Director of Communications & Education at the Payments Council said: “A busy summer of socialising means that there is more money flowing between friendship groups. And as a result there are even more reasons to use Paym to pay back friends and family and to make sure that they pay you back too.
“The mobile has become an integral part of how we arrange our social lives – we each have our friends’ numbers at our finger tips. Now that info’s all you need to pay back your friends and family quickly, safely and easily if you need to pay them back for whatever you’re up to this summer.”
The Big Paym Payout
Be in with a chance to win £250 every day by entering the Paym photo competition.
All you have to do to enter is follow @paymnow on Twitter, or ‘like’ the Paym page on Facebook and post a photo relating to the daily theme, with the tags @Paymnow and #PaymPayout before 5pm each day. Terms and conditions can be viewed at: paym.co.uk/big-paym-payout
What is Paym?
It’s an easy, secure way to send and receive payments directly to a current account using just a mobile number
Paym means there is no need to ask for other people’s sort code or account number, or tell them yours
Anyone using Paym to send money will also be able to check the name of the recipient before confirming the payment, so they can be sure they’re sending it to the right place
Paym is available to more than 30 million people across the UK
Customers of Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds Bank, Santander and TSB are able to send and receive Paym payments
The service will expand further later in the year, becoming available on more than nine out ten current accounts, covering in excess of 40 million customers.
To find out more about how to register for Paym, and to calculate how your IOUs compare to the national average, visit paym.co.uk