Research from Equifax, the consumer and business insights expert, reveals 32% of people in the UK have had to borrow money from friends or family. The online survey, conducted by YouGov, found 31% of these loans were to pay for household essentials such as food, 23% to pay for car repairs and 18% to pay for utility bills.
In many cases loans were taken to help pay off other debt; 13% of respondents needed the money to help with mortgage payments or rent, 11% to help pay off credit cards and 4% to pay off a short term lender.
With escalating house prices placing increased financial pressure on the younger generation, 29% of under 35 year olds have asked family or friends to help with a house deposit.
When asked about borrowing more broadly, 35% of respondents said that excluding mortgages, credit cards account for the largest part of their debt. Student loans are the biggest proportion of debt for 19% of the UK, and personal loans for 11%.
Thirty-five to forty-four year olds are the least aware of how much they owe; 23% don’t know the sum of their total debt, compared to 17% across all age groups.
The main reasons for getting into new debt include paying for home improvements or a new car, both cited by 26% of respondents. Paying a vet bill followed in third place (18%), ahead of a holiday (14%). 6% of respondents admitted they would get into debt purely to keep up appearances around family, friends or work colleagues, for example to buy the latest fashion accessories.
Jake Ranson, Banking & Financial Institutions Director at Equifax UK, said: “Personal debt is rising and becoming far more socially acceptable, with many people now willing to borrow for non-essentials such as home improvements and holidays. As a result lenders’ responsibility to ensure their customers don’t borrow more than they can afford to pay back has become more important than ever.
“Individuals also have a responsibility to take their finances into their own hands. It is concerning to see how many are asking friends and family for help paying off existing debt. By understanding how much debt they’re in and the products available, people can better manage their repayments.”
For more information, visit www.equifax.com