‘Bank of mum and dad’ owed over £13bn
A recent report found that more and more cash-stripped kids with bad or non-existent credit scores and struggling to get approval on a loan or credit card turning to their parents for a loan during the last 12 months.
24% of 18-50 year olds have borrowed an average of £2,432 from their mum or dad.
Many still owe them £1,998 of that today.
Added up, this means that parents across the country are owed a staggering £13,184,258,544 (over thirteen billion pounds).
A spokesman for Amigo Loans, which commissioned the research said: “It’s astonishing that so many adult kids aren’t able to get credit because they simply haven’t had it before.
“And, it’s staggering to think how much parents are collectively out of pocket for lending us money.
“While it might be easier, quicker and even cheaper for people to turn to their parents when they need some extra money help, it might not help in the long run.
“By relying on mum and dad for a financial boost every now and then, not only are you leaving them out of pocket, but it means you aren’t building up your own credit score to help you in the future.”
26% have of those surveyed had also taken out a credit agreement in their mum or dads name due to their bad credit score or already having too much credit in their name for something like a mobile phone contract.
Despite the high borrowing rate from the ‘bank of mum and dad’, a quarter of them do acknowledge that borrowing from family will mean that they aren’t creating their own credit score and financial history.
The study found that on average, an adult will borrow £4,835 from their parents over a lifetime, often just to meet day-to-day costs.
Needing to buy a car was the second most common reason, and losing a job third.
Despite needing to borrow the money, many feel guilty for asking for money from their parents. 73% state that they are determined to pay-back the money.