Families bail out friends and relations

Almost a third (31%) of UK families are providing financial support to their extended family and friends, according to the latest Aviva Family Finances Report.

Loans and gifts are being given to ageing parents, adult children, siblings and close friends, with families paying out £442 a year on average.

The most common recipients of financial assistance are mothers (10%), fathers (7%) grown up children who do not live at home (7%) and sisters (5%).

Furthermore, 3% of people questioned provide financial support for their close friends, as the notion of “family” extends beyond blood relatives.

Changes in financial circumstances (25%), meeting one-off expenses (21%) or dealing with living costs after unemployment (20%) were the top reasons for providing financial help, while poor financial management accounted for 19% of away giving.

One in seven families who provide support say they have made cut-backs in the last few years so they can continue to provide assistance, and 11% have been less able to support their extended families as they themselves are now struggling.

The research also reveals that providing financial support to family and friends can be a barrier to saving (46%), repaying debts (24%), putting aside money for their children (14%) and paying into a pension (11%).

Aviva’s director of workplace savings, Paul Goodwin, comments: “The stark truth is that … by providing their families with £442 annually, over a working lifetime of 40 years they could effectively be giving away two thirds of the typical UK pension pot.”

Mr Goodwin is therefore urging people to think about the support they can provide that doesn’t involve cash, and see if they can help family members and friends in more practical ways.

Tags: family, financial support, friends

Category: Aviva News, Insurance News