One third of Brits forced to borrow money from friends and family, findings reveal
One third of people in the UK have had to borrow money from friends or relatives to help with essential expenses, new research from consumer credit reporting firm Equifax has revealed. What does this mean for individuals who are trying to manage their debt?
More of us becoming financially reliant on loved ones
Equifax’s online survey found that 32% of respondents have borrowed money from family and friends, with the majority having done so to cover food and other essentials. 23% of these loans were needed to fund car repairs, while 18% helped towards household bills.
The survey results also revealed that loans from loved ones were used to repay debts, including mortgage instalments or rent (13%) and credit card bills (11%). Further, over a third of respondents revealed that after mortgages, credit cards made up most of their debt.
With more people borrowing money from a variety of sources, it's becoming harder to track debt. Nearly a fifth of those surveyed were unaware of the total amount they owed, and this rose to a quarter among those aged between 35 and 44.
Total unsecured debt is on the rise, too
Equifax’s research came on the back of separate findings from the Trades Union Congress and Unison, which revealed that the total unsecured debt in British households had increased by £48 billion over a three-year period from 2012 – reaching £353 billion in 2016. Now, more than three million families use over 25% of their combined income on repayments, while 1.6 million households pay over two-fifths of their income.
Banking and Financial Institutions Sales Director at Equifax UK, Jake Ranson, believes both lenders and individuals need to be aware of the current situation: “[L]enders’ responsibility to ensure their customers don’t borrow more than they can afford to pay back has become more important than ever”, Mr Ranson said. “Individuals also have a responsibility”, he continued. “By understanding how much debt they’re in and the products available, people can better manage their repayments.”
If unsecured debt is an issue in your household and you think you would benefit from professional advice, don’t hesitate to get in touch with Dukes Bailiffs. Our advisers will be happy to explain how you can manage what you owe.