Lending to family 'is a difficult situation'

By Sarah Engle, Mon 23 Aug 2010 - Published in Loans

People can find that lending money to family members places them in a "difficult position", according to an expert.

Last week, research from Scottish Widows revealed that eight per cent of adults have given or lent money to their parents, with the average sum standing at Ł8,250.

Chartered financial planner Martin Bamford, managing director of Informed Choice, pointed out that people who lend money to their families run the risk of falling into debt themselves.

"If there is a family obligation [or] you have to lend money to a parent almost as a repayment for money they have lent you in the past … it can tip people into a very difficult position," he commented.

Mr Bamford pointed out that younger people are not immune from events such as redundancy or health problems and said they have to make sure they keep enough money in their savings to cover against these eventualities.

The expert added that people undertake thorough financial planning when deciding whether to lend money to their family members and consider their long-term monetary health rather than just their immediate circumstances.

News Categories

News Archive

News: Lending to family 'is a difficult situation'