twenty pounds in hand

Peer-to-peer lending is a growing area of online funding for small business. Recent research highlights a more literal form of peer-to-peer help: young people are increasingly funding their leisure activities by a traditional route of borrowing from friends. However, they are not always paying them back.

Six Glastonburys? 

A study by the Payments Council, the UK payment systems regulator, shows that more than 40% of young people (18-25) borrow from friends and family to fund summer socialising and a third of the group expect to be short to the tune of over £60 on average due to lending to friends who don’t repay them. This would mean that this age group owes each other £148 million – the equivalent of Glastonbury festival selling out six times over (or the annual wage bill of Liverpool FC with a bit to spare).

Aside from the purely economic cost, there are other effects – lending/borrowing between friends causes friction for over 70% of the group.

And they spend it on…?

…Having fun, it would seem – nearly 40% have a drink in a bar or club, 30% buy a meal and over 20% go to the cinema, a concert or other event. Less than 15% borrow to cover basics such as rent.


The Chief Justice of the US Supreme Court recently described mobile phones as “such a pervasive and insistent part of daily life that the proverbial visitor from Mars might conclude they were an important feature of the human anatomy.” In the same spirit, the Payments Council is using the research to highlight the availability of the ‘Paym’ system, whereby friends and family can make and receive payments by just using mobile numbers. Technology is not yet, however, a ‘pervasive and insistent’ way of making repayment, even for the young – only 44% of ‘summer loans’ were paid back online or by using mobile banking services.

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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.