A new study from comparison website Gocompare.com has revealed that some people are turning to their elders to cover the cost of holidays, nights out and other expenses. The survey found that more than one in three (35%) people aged 65 or older often lend large amounts of money to friends or family, and this is despite figures from the Office for National Statistics showing that they have, on average, almost half the household income of the rest of the population**.
When asked, 33% of those aged 65 and over said that they have lent money to pay off a loved one’s bills or debts. Almost one in ten (8%) said they previously loaned money in order for a friend or family member to buy a house, suggesting that many people are still struggling to get a foot on the property ladder without financial assistance.
More than one in ten (12%) said that they had lent at least £1,000 or more in the last 12 months, meaning that over 65s gave out a staggering £1.2 billion in the past year.
Out of all the age groups questioned, the over 65s were the most likely to lend a loved one over £1,000 with almost a quarter (24%) saying they would do so. Conversely, the over 65s were also the age group least likely to ask for money, with more than half (59%) saying that they would not borrow from a friend or family member.
More than three quarters (76%) of over 65s said that they would be embarrassed to ask a loved one for money – the highest proportion of all the age groups. What is more, 16% of this age group said that they would rather take out a payday loan than turn to someone they know for financial help.
Matt Sanders, banking and credit card expert at Gocompare.com, said; “It’s interesting to see that the over 65s are the most likely to lend large amounts of money to loved ones and the least likely to ask for anything in return, despite having a lower household income than other age groups.
“Though our research has found that the majority of adults of all ages have either lent their family and friends money in the past, or would consider doing so (64%), it’s worth remembering that this can cause disputes. In fact, a third (33%) of people surveyed said they had either fallen out with a loved one over money or know someone that has.
“And it’s perhaps the desire to avoid such clashes that leads so many over 65s towards payday loans rather than asking for help from people close to them. If you do have to borrow money from someone you know, or lend money to them, it’s important to commit to an agreed repayment plan, thereby preventing any conflict and avoiding having to resort to short-term, high-interest payday loans.”
Notes to editors
On 30th July - 3th August 2013, Vision Critical conducted an online survey among 2,002 randomly selected British adults who are Springboard UK panellists. The margin of error-which measures sampling variability-is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.
*£1.2 billion figure is calculated by 12% of people aged 65 and over saying they had lent at least £1000 to a loved one in the past 12 months. According to the Office for National Statistics population pyramid, in 2012 there were 10,327,507 people aged 65+ in the UK. 12% of 10,327,507 is 1,239,301 multiplied by £1000 equals a minimum of 1,239,301,000 or just over £1.2 billion. Any discrepancies are based on rounding.
** Figures taken from Office for National Statistics report titled Income of Retired Households, 1977-2010/2011 available online at: http://www.ons.gov.uk/ons/dcp171776_284355.pdf