Debt worries see Brits turn to families for loans

Wed, 17 Aug 2011

Brits are hoping to avoid the prospect of debt piling up and their credit rating suffering by turning to their families for financial support.

According to new data from Aviva, 63 per cent of consumers have noticed an increase in inter-family lending as a result of the credit crunch.

Almost two-thirds (61 per cent) look at this trend as a positive thing, although just 15 per cent of families lend to each other on a regular basis.

Scottish families are the most generous of all, with the average loan totalling £3,200 - well above the UK average of £2,300.

Aviva at retirement director Clive Bolton 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."

He added that this has led to a change in family dynamics from the turn of the century, with a shift back to the preservation of wealth and financial reliance within the family unit.

Meanwhile, Obligo director Chris Gardner recently warned that the repossession figures are being kept "artificially low" by interest rates and lender forbearance, hinting that more debt problems could be just around the corner.
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