Borrowing money from parents on the rise

family law

More young adults in Scotland are borrowing money from their parents, according to new research.

More than a third – 34 per cent – of people between the ages of 18 and 24 took a loan from the “bank of Mum and Dad” last year. This is up from the quarter who did the same in 2015.

The amount of money borrowed has also increased significantly. In 2016 parents lent their children an average of a little over £3,987. This represents a 29 per cent increase from the previous year when the average amount lent was just under £3,080. The number of people lending their children more than £10,000 also rose by 23 per cent over the same time.

These figures come from the Bank of Scotland. Head of Customer and Change Rachel Bright said it was “interesting to see the shift in size of loan being given to children by the bank of mum and dad over the year”.

The rise could be because they want to help “their children with education costs or getting on the property ladder” she suggested.

However fewer adults between 25 and 34 years old are borrowing money from their parents. In 2015 39 per cent took such a loan but last year that number had fallen to a third.

The Bank of Scotland also found that among those whose parents lend them money, half felt guilty about it. This is an increase from the previous year when just 44 per cent said they felt bad. Despite this, the number of those who believe they will actually have to pay the money back fell between 2015 and 2016. Just 34 per cent thought their family would expect repayment, down from 40 per cent the previous year.

In January research from a financial firm found that almost a third of UK parents were unwilling to leave their married children an inheritance because they were concerned the money would be lost during a divorce.

Photo by Andrew Gustar via Flickr under a Creative Commons licence.

Stowe Family Law Web Team

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