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.

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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%).

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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. This may possibly be due to mothers being less likely to be income earners with strong financial grounding. 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.

Britons have had a largely positive experience with lending money to family members. In 60% of cases when money is lent, it is repaid swiftly with thanks.

Darren Stevens, Customer Services Manager at Chelsea Building Society, said of the research findings:

"Whereas previously Britons could rely on their family members to bail them out when they got into difficulty, now when they turn to their families as a last resort they might find that their families are also suffering the pinch. A lack of extra funds means that families have to help each other out in non-financial ways.

Britons should start taking control of their own finances through proper financial planning and saving, bypassing a potentially embarrassing situation within their own families".

Notes 1,066 UK residents were surveyed between the 29th June and 6th August 2008 using an internet research tool. They represent a variety of income brackets as well as regions. For the purposes of this research, 'Immediate Family' was calculated as Mother, Father, Brother, Sister, Son and Daughter. All other relatives were considered 'Extended Family'.

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For further information please contact:

The Wriglesworth Consultancy

Chelsea Building Society

About Chelsea Building Society
Chelsea is the UK's fifth largest building society with assets of over £13billion; they pass on the benefits of their mutual status through lower rates for borrowers and higher rates for savers. Chelsea is one of the most efficient building societies in the country and hugely successful at what they do, lending safely and providing a secure home for people's savings. With a strong commitment to corporate responsibility, Chelsea was one of the first in their sector to launch a report and website dedicated to the work they do.

For more information on Chelsea's corporate responsibility visit www.chelseacares.co.uk