Channel 4 show to explore family lending issues

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Provisionally called The Payback, it will aim to resolve tensions or disputes that have arisen because of family lending, with affected family members being aided by a financial expert who will help them draw up a plan for how the borrower will save in order to pay back what they owe.

The show's makers are currently inviting members of the public to come forward and apply to take part in the episodes, with filming due to begin in the next few weeks.

And while this means the actual broadcasting of the programme is still several months away, it's nonetheless on course to be particularly timely, with as many as a third of first-time house buyers needing to be financed by the Bank of Mum and Dad.

Statistics

The show - due to be broadcast at some point in the new year - will not only focus on people who owe money to a family member, but also on people who are correspondingly owed money by a relative.

While there aren't any especially recent statistics on such intra-family lending, a 2014 report from Scottish Widows found that it's relatively common, with 28% of people have borrowed from friends and family, and the average amount being £2,123.

On top of this, it also found that 25% of friend/family lenders didn't expect to get the money they loaned back, while 55% of lenders said they were nonetheless happy to have helped out their loved ones.

What's interesting here is that the flip side of this 55% figure is that around 45% of family lenders must not be happy to have loaned money, and could perhaps even regret their decision to have done so.

This is precisely one of the areas in which the Channel 4 programme is likely to enter the fray, since not only will it help affected family borrowers pay back the money they owe, but it will also help families and friends rebuild any relationships that have been strained or damaged as a result of debts.

It will, therefore, be as much about personal relationships and counselling as it will be about personal finance.

The current economic climate

And if anything, the recent financial and economic climate would most likely mean, that since 2014, the percentage of people lending to family members or friends has only risen beyond 28%.

That's because the UK public has suffered a living standards squeeze in recent months, exemplified most notably by how inflation overtook wage growth in May, reaching a four-year high of 2.9% while salaries increased by only 2.1%.

Yet it's also exemplified by the reduction in personal savings and the surge in credit card borrowing. It's also underlined by extortionate house prices, which despite flagging a bit in recent months have done little to roll back the massive growth they've witnessed in previous years.

And house prices touch on another big source of intra-family lending: the Bank of Mum and Dad, which was found by Legal & General in May to be the ninth biggest lender in the UK.

The financial services company found that the "Bank" will lend out £6.5 billion this year, and that it lent out £5.3 billion in 2016.

Seen from the perspective of the upcoming show, that figure represents a lot of family members potentially owing or being owed money, in addition to all those who give or receive non-mortgage related loans.

Inviting the public

And it would seem that Boundless Productions - the company producing the programme - are hoping to tap into this vast wealth of family members, since they are inviting anyone affected by the issues above to get in touch via one of the points of contact listed below:

• Email: [email protected]
• Call: 0207 691 5245
• Mobile: 075217 99293

Their programme obviously won't do much to ameliorate the underlying economic situation that's making so many people turn to family borrowing, but hopefully it will provide at least some aid to some of the people whose lives have been affected by the need to borrow from a friend, sibling or parent.