What’s money between friends?

People in the UK are owed more than £26 billion in unpaid debts by their friends and family, new research by secure online payment provider PayPal reveals.

The research, which looked into the lending and borrowing habits of people in the UK, revealed that 29 million people (or 48%) have lent money to friends and family within the last year, and are all owed an average of £898.52 each. When it comes to borrowing money, more of us turn to Mum first for help, with 16% of people in the UK owing money to their Mum, more than anyone else, whilst just 9% owe money to their Fathers.

When it comes to lending friends money, six million people have lent money to their best friends in the last 12 months. However, it is family who are the biggest pull on UK purse strings, with just over a quarter (26%) of people lending money to family members in the last 12 months. A total of £14 billion has been lent out to family members in the last year.

Cristina Hoole , PayPal UK spokesperson comments: “Everyone will, I’m sure, have either borrowed or lent out money to friends and family, often on the spur of the moment, however as the study has shown these potentially small amounts of money can soon add up. On average we’re each owed almost £900 and with Christmas just round the corner perhaps we should be looking to call in some of those unpaid loans rather than relying on credit to see us through. Even if you’ve already saved for Christmas so everyone else is covered, almost £900 will almost certainly stretch to make your dream item a reality whether it is a designer handbag or a new set of golf clubs.”

Just over half (56%) of the population, who have lent out money within the last 12 months, always make sure they get the full amount back.

Hoole continues: “However, for the millions that don’t succeed in getting their money back, one of the hurdles or excuses could be timing or convenience. I’m sure we’ve all heard: I’ll give you cash when I see you or I don’t have my chequebook with me – with PayPal people can send and receive money immediately using just an email address or their mobile phone. The simple and safe system could mean you’re not the one left out of pocket anymore.”

The research also revealed that when we do lend money to family, it is not always plain sailing. 16% of people (9.6 million) admit they have fallen out with family members when it comes to lending money to them. 3 million people in the UK admit that the rift caused by money issues, has not yet been resolved and still exists.

Hoole continues: “Lending and borrowing money when family members are involved can get difficult, this might explain why so many rifts develop, and sadly for 3 million people the rift has not yet been resolved. However difficult agreeing with your friends or family when you might expect to get your money back up front could save a lot of confusion and hurt further down the line, as well as saving you from being out of pocket.”