You are here: Home - Credit Cards & Loans -

‘Bank of mum and dad’ owed over £13bn

0
Written by:
19/11/2012
The ‘Bank of mum and dad' has handed out more than £13bn to their kids, as these grown-up children struggle to get approvals for loans and credit cards.

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.

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2225647-rbs-logos
Monday newspaper round-up: RBS branches, BP, Virgin

RBS branch spin-off; BP share buy-back; Virgin Atlantic hits Scotland

Close