The family coffers run dry

Rising costs leaves families unable to help one another financially

The rising cost of living is preventing Britons from giving their families financial help, according to Chelsea Building Society. As 78% of people cut down on their personal spending, families can no longer rely on each other for loans and financial help, and instead offer other types of support and assistance.

Chelsea Building Society surveyed over 1000 family members and discovered that while 59% of people are willing to help their families - almost 30% are unable to do so due to the rising cost of living. Families are countering this inability to help financially by offering more traditional assistance to each other. Most commonly this is in the form of providing accommodation free of charge to immediate family members 54% and offers to look after children so that immediate family members can work 51%, far outweighing those who are prepared to make a specific financial sacrifice or extend a financial helping hand. Only 15% of adults would take out a joint credit card with an immediate family member in financial straits Table 1

Table 1:

The research also reviewed how financial help within the family works. When it comes to paying off a relative's debts families are marginally more likely to loan money 29% than give it 26%. This contrasts to when families help each other out with big purchases, when they are more likely to give money 13% than lend it 10%. This is possibly due to the fact that people view money problems as the ultimate responsibility of the person who has got into debt. Recent economic straits are bringing the family together financially, with grown up children still living with parents for free or reduced rent 13% and Grandparents occasionally subsidising school fees 7%.

Table 2:

Chelsea's research showed a clear difference in attitudes towards lending to immediate and extended family members. As personal financial circumstances may become more stretched, families are understandably much more likely to lend to those closest to them. 22% said that they would remortgage their house to help out an immediate family member in financial difficulty', but only 2% would take this step for a relative in their extended family.

Almost 6 out of every 10 Britons would be happy to help out their mothers financially, should they need it but less than half 45% would offer the same assistance to their fathers. Nuclear family lending remains pretty stable, with 37% prepared to help their brothers or sisters financially, and 33 and 34% prepared to help out their daughters and sons respectively.

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2008-09-01 00:00:00 © Moneyextra.com