63% of consumers surveyed by Aviva say there has been a rise in family approaching relatives for money as a direct result of the credit crunch.
While 61% see it as a positive idea that families are able to turn to each other for financial aide as a first port of call, only 15% of families in the UK are currently lending money to each other on a more regular basis.
Aviva says that although the trend of inter-family lending is increasing, consumers may be seeking professional advice first from organisations such as the Citizens Advice Bureau.
In its recent Real Retirement Report, Aviva found that people who were in debt to family members and friends owed them substantially more than other sources of borrowing such as overdrafts or store cards. Of retirees with this type of debt, those aged between 55 and 64 owe on average £2,100 to family and friends, with this figure increasing to £6,790 for those aged 65 to 74, although the majority of lending between family and friends is likely to be of smaller amounts.
Out of the whole of the UK, Scottish families lend the most to each other, with an average amount of £3,200, above the UK average of £2,300.
Despite 80% of those in England and Wales expecting their money back, with one in 10 charging interest higher than bank rates, only 30% of Scots expect to see sight of this money again and if they do, they would charge little or no interest at all.
Aviva says its findings suggest that you would be much wiser approaching a female relative for the highest chances of getting a loan and at the cheapest interest rate, if any interest charge at all. In fact, the results quite clearly show that just 13% of women would charge their family interest on loans at bank rates or higher, compared to 40% of men. However, the findings do show that men lend on average a third more (£2,643) than women (£2,076).
Clive Bolton, ‘at retirement’ director at Aviva, said: “The credit crunch has had an impact on all members of society particularly it seems for those in retirement whose available credit lines may be limited. The implications of this seem to reflect a change in family dynamics from the late 20th century when greater independence was achieved through the wider availability of credit
