Almost one in four of us have fallen out with friends over money issues and 42% have lent money to a friend only for it never to be returned, according to new research out today. The study found that 74% of us have lent money over the past 12 months, with half of us lending up to £500 and nearly one in 20 (4%) having lent over £5,000.
The survey was conducted by Flender, a peer-to-peer lending platform that enables consumers to raise finance through friends, family and social network connections. It questioned Brits on our attitude’s to lending friends and family money and also found:
- The UK social lending industry – loans between friends & family – is estimated to be worth over £2.9 billion a year
- Most (95%) of us have never charged interest to anyone we know, but half would consider doing so and feel it is acceptable to charge interest to those that we personally know (47%)
- Almost a quarter (24%) lent money because they felt that the person who asked was desperate – For 23% it was a case of honour, for example returning a previous favour
- 18% admitted they felt obligated to lend money as it was for a relative – but only 8% felt the same responsibility to their friends
- Over half of us think the fair amount to charge in interest would be 1%, while 89% of people think that charging up to 5% interest is acceptable
- 42% haven’t had their loans returned, and almost a quarter (23%) of people have fallen out with someone over money issues relating to lending and borrowing
There were also some obvious differences between the sexes in the research, with many more women having lent money in the past 12 months. Whilst 8% of blokes admit to lending money this year, that figure was 12% for women, who are also are more likely (46%) than men (41%) to pluck up the courage to borrow from friends and family. The most popular amount for men to borrow is £20, whilst for women that amount is £100.
It’s also the younger generation that are more likely to have a loan transaction with friends and family, with 84% of under 35s having lent in the last year, in comparison to 69% of over 35s. Surprisingly, only 36% of over 35s have borrowed money from friends and family in the past year, whilst this figure for under 35s is a hefty 62%.
Commenting on the findings Kristjan Koik, C-Founder & Managing Director of Flender said:“The social lending market among friends, family and business connections has never been formalised, which is crazy when you consider that this is a market worth just under £3 billion a year. There are many arguments between friends and family over money and we believe our platform can make this a thing of the past.”