Mum and dad short-changed by cash-strapped kids
January is the cruellest financial month, breeding lots of temporarily broke people eagerly awaiting the first pay day of the New Year and borrowing money from their parents to tide them over.
This is not the time to compare credit cards, but rather to make ends meet by tapping mum and dad for a few pounds. Indeed, a recent survey by Money Shop found that 58% of people borrowed from their parents in the last year, with £275 being the average amount borrowed, rather than go too deeply into the red on their UK current accounts.
About 23% ask for financial help to not go over the overdraft limit on their UK current accounts, although only 41% pay back the full amount, leading to 7% of the borrowers having a family argument about paying the money back.
Money Shop’s managing director, Paul Mildenstein, said: “Coming towards the end of the month when money is short can be difficult, especially when something crops up that you need money for. January is the worst month of all, as many people were paid before Christmas and won’t get paid again until February.”
He continued: “People have two choices – go over their authorised overdraft limit on their UK current accounts and face charges, or borrow from the Bank of Mum and Dad, with all the problems that entails.”
As a third way, Money Shop has launched a Cash ’til Payday scheme, whereby consumers can borrow up to £250 at a cheaper rate than going over the overdraft limit on their UK current accounts.