Helen Undy, Head of External Affairs, Money and Mental Health

The bank of mum and dad

Understanding the mental health impacts of borrowing from friends and family


How we feel about debt is complex, and as Rose Acton blogged this week, it’s not always related to how much debt we have.

There’s clearly a difference between borrowing from a high-cost payday lender and taking out a mortgage, between a student loan and catalogue credit. We tend to think of some as ‘good’ or ‘sensible’ debt, and others as less prudent forms of borrowing – these distinctions may not always be accurate, but they certainly influence the way we navigate the financial world and how we feel about our money.

But when it comes to borrowing from friends and family, we’re mixing finances with a complex emotional relationship and while the interest rates may be preferable, the emotional impacts are harder to calculate in the long-term.


Borrowing is on the rise
Today Step Change published their mid-yearbook, which showed that borrowing from friends and family is on the rise, with the average amount borrowed rising to over £4,000 and 28% of their debt clients having this sort of debt.

This fits with findings from our own research – in our survey of people with mental health problems, 47% said that they owed money to friends or family (from a sample of over 3,000), higher than any other form of borrowing. In some circumstances borrowing from family can be helpful – the borrower gets access to funds which they later repay and the family member is pleased to be able to help. However, when it goes wrong there is more than just our credit history on the line.


“My financial situation causes me way more stress…It’s created problems within relationships as I’ve borrowed money from family members to try and sort things out.”


Relationships under pressure
Research from relate has consistently shown that money worries rank as the top strain on couple relationships, and a poll by Step Change found that one in five respondents reported negative effects of debt on their relationships with friends and family.

For people with mental health problems this can be a particular issue. It’s a perfect storm; while strong relationships can be key to living well with and recovering from mental health problems, mental health problems themselves can put strain on relationships, as well as causing financial difficulty. That financial difficulty makes us more likely to borrow from friends and family, which in turn can put more strain on relationships, affecting our mental health.

When considering the wellbeing impacts of debt, it’s important to ensure that we understand the different types of debt we’re talking about, not just the amount that’s owed. Worrying about debt collectors and high interest rates can have a significant impact on our mental health, but so too can the damage to our personal relationships caused by more informal borrowing relationships.

Find out more about the links between money and mental health in our report, here