People are turning to elderly relatives for help with the cost of holidays, nights out and other expenses, according to new research from comparison website Gocompare.com
More than a third (35%) of those aged 65 and over said that they often lend large amounts of money to friends and family. This is despite figures from the Office for National Statistics (ONS) which suggest that this age group has, on average, almost half the household income of the rest of the population.
When asked, 33% of over 65s said that they have lent money in order to pay off a loved one’s debt. Almost 1 in 10 (8%) said they had loaned money to a friend or relative so that they could buy a house - a sign that many people are struggling to get on the property ladder on their own.
The amounts being loaned out by the elderly are not always small; 12% of over 65s said they had given a loved one a loan of at least £1,000 in the last 12 months. This age group was the most likely to lend out this amount to loved ones, with 24% saying they would do so. However, they were also the least likely group to ask for money; 59% said they wouldn’t borrow from a friend or family member.
Perhaps unsurprisingly, the over 65s were also the most likely age group to say they would be embarrassed to ask a loved one for money (76%), with a concerning 16% saying that they would rather take out a payday loan than ask for help.
Matt Sanders, banking and credit card expert at Gocompare.com, said:
“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.”