Brits 'left out of pocket' from lending to friends and family

Britons who may feel obliged to help out their friends and family members as they struggle with the credit crunch are leaving themselves at risk of being left out of pocket, it has been claimed.

According to research by AA Personal Loans, 20 million people in the UK are loaning out money at an average of £607.22 a time, but only half get the cash back.

The main reason for this was that people are not asking for the loan to be repaid for fear of looking stingy or being embarrassed.

However, it could be that they are being taken advantage of, with some people saying they have lent money so that their friends or relatives could go on holiday or pop down to the pub.

Contrary to the popular stereotype, Scots were the demographic most likely to pay back any money owed, with 76 per cent doing this, as opposed to only 67 per cent in the Midlands and Wales.

Head of AA Personal Loans Mark Huggins said that while it is nice to help people out, Brits should be careful that they do not leave themselves short.

"Our research indicates that unless you can afford not to expect the money back immediately, don't feel pressured into shelling out your hard earned cash," he concluded.

A recent poll carried out by Chelsea Building Society found that a growing number of people are helping their relatives in ways other than lending money, with 54 per cent providing free accommodation to family members and 51 per cent looking after children so that a member of their family can work.