Brits owe their friends £148m

Updated
Summer socialising leads to £148 Million[i] in unpaid IOUs
Summer socialising leads to £148 Million[i] in unpaid IOUs



A third of young people expect to be owed an average of £64 each this summer, after lending to friends who don't pay them back.

This may not seem like much, but it equates to £148million in unpaid IOUs, according to mobile payments firm Paym. To put this into context, this is the equivalent of selling out Glastonbury Festival six times!

Over the summer 18 to 25-year-olds expect to spend an average of £38 a week on socialising and leisure activities.

Summer socialising increases the likelihood of both lending and borrowing amongst friends as 41% of 18 to 25-year-olds surveyed use loans from friends and family.

Who do young people lend money to?

  • 92% will lend to close friends, with IOUs worth £26 on average per loan

  • 80% lend to their partner or spouse, and these are the most costly, averaging £43 each time

  • 74% will lend to housemates, covering £20 on average per loan


Find out if you could pay less for a loan by borrowing from a peer-to-peer site

Borrowing the occasional tenner from a friend or partner is perfectly understandable but when these IOUs add up, things can get problematic.

Research by Paym reveals that 71% of young people acknowledge lending and borrowing money between friends can cause friction in their relationships.

Why do young people borrow money?

The ways in which these small informal loans are used demonstrates how important the leisure economy is to young people and how they prioritise their spending on social situations and having fun.

The top five reasons for borrowing from friends are:
1. A drink in a pub, bar or club (38%)
2. Lunch or dinner (29%)
3. A small meal e.g. sandwich (26%)
4. Cinema, theatre, concert or event tickets (22%)
5. A drink in a café (21%)

Only 14% will borrow money to help cover a household cost, such as rent or food, suggesting that young people ensure they have the important things covered.

Despite these IOUs being commonplace, they don't appear to create financial dependencies - only 4% say they actually rely on borrowing from friends to finance their summer plans.

Although 16% of young people rely on their parents to get them through the summer, not all young people are dependent on friends and family to help fund their summer socialising.

The majority of 18 to 25-year-olds (56%) pay their own way for summer fun out of savings and a further 36% use earnings from a summer job.

How to manage IOUs

When it comes to paying back their summer IOUs 44% of 18 to 25-year-olds rely on technology using online or mobile banking and mobile payments services.

Registering your mobile number for Paym can make getting paid back easier.

Paym is an easy and secure way to send and receive payments directly to a current account using just a mobile number. Paym means there is no need to ask for other people's sort code or account number, or tell them yours. With Paym, paying back friends is as easy as sending a text.

To find out more about how to register for Paym, and to calculate how your IOUs compare to the national average, visit paym.co.uk



Read more about loans and debt

When does everyday borrowing become a problem?

Why speaking up about money worries really does help

Regions with the highest levels of personal debt

Paym service to reach 30m people


How to Borrow Money from Friends and Family
How to Borrow Money from Friends and Family


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