The average amount Brits borrow from family members has more than doubled over the last 12 months and now stands at almost £6,000, equating to £281 billion nationally.
Analysis by price comparison website MoneySuperMarket found the number of people who have borrowed from family members is on the increase – rising from 55% to 63%.
The average amount borrowed has also increased by 140% from £2,479 in 2019 to £5,914 today, with more than one in 10 people (13%) borrowing between £10,000 and £50,000.
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More than a fifth (23%) of Brits cited buying a new car as the primary reason for borrowing from a family member – up 1% from 2019.
A further fifth (20%) borrowed for a house deposit (up 1% year-on-year) and 10% used the loan to pay off a bill that was higher than they anticipated (down from 15% in 2019).
The research found that mothers are most likely to act as a lender, with 30% of loans coming from the bank of mum. Almost a quarter (23%) of loans are given by both parents jointly, while a fifth (21%) of loans are given by dads.
When asked why they chose to borrow from their family rather than a bank, 44% said it was so they did not have to pay interest, two in five said it was so that they could avoid running up debt with a bank, and a quarter said they needed the money urgently.
Those aged 25 to 34 are the most likely to have taken a loan from a family member, at 70%. They also borrow the most, at about £6,864.
Sally Francis-Miles, money spokesperson at MoneySuperMarket, said: “The average amount of money borrowed from family members has more than doubled in the past year largely to use towards big purchases like cars and property to avoid paying interest.
“If borrowing from family is an option for you, and you have agreed how and when you would pay it back so both parties are happy, it can be a good way of financing big purchases.
“If this isn’t an option, there are other cost efficient ways to borrow such as interest-free credit cards. Just make sure you pay the minimum repayment each month and pay any debt off before the 0% interest ends. Do your research and ensure you get the right product for your needs, at the lowest cost and be aware of taking on more than you can afford.”