My Best Friend Has Loaned Me Thousands Of Pounds

"My best friend has easily loaned me thousands over the 11 years I’ve known her," says 29-year-old receptionist Tina*. "I ask her for an emergency £150 every month or so, sometimes for meals and drinks out but mostly to survive off recently."

Tina works 35 hours a week for £10 an hour, which just about covers her rent and bills in London. "I have to do bar work or borrow to eat or do anything fun," she continues, adding that her parents would tell her to move home if they knew she needed extra money so regularly. 

"Three years ago my parents kicked me out and I was effectively made homeless," says south Londoner Beth*, 28, who works part-time in hospitality. "Because I have a job, I couldn’t get benefits and have been paying around £1,200 on government-issued temporary hostels ever since. I’ve had to cancel work shifts before because I had to choose between spending money on food or travel." 

Beth got herself into serious debt from credit cards and loan companies, trying to make ends meet, and it took nearly becoming a sugar baby to reach out to friends. "I hate asking for help. It made me feel ashamed, guilty and dirty, but I started borrowing money from friends for groceries as a last resort," she says. 

In recent months, Beth’s gas and electricity bills have almost doubled as the cost of living has soared. While many of us were focused on tanning in paddling pools during the heatwave, she was more concerned about the electricity usage of her fan. "I used to top up £25 for gas and electricity per month but now it’s at least £40 and the fan has added an extra £11," she continues. "I sacrifice food to pay for it; I’m hungry but at least I’m cool."

The cost of living crisis has Britain in a chokehold, with new figures from the Office for National Statistics confirming that living costs have hit another 40-year high. The rocketing cost of food and energy drove inflation to 9.4% last month, meaning the cost of living is 9.4% higher than this time last year, while most incomes remain the same.

As many struggle to make ends meet, young people are turning to friends for financial support. The Bank of England recently revealed that credit card borrowing fell to a four-month low in May and data from money management app HyperJar shows that one in four Brits are loaning more money to friends than ever before.

"Friendship has become a vital lifeline amid the cost of living crisis," says Mat Megens, personal finance expert and founder of HyperJar. "Our research shows that only 13% of people talked about money with their family when they were growing up. So it makes sense that younger people are more likely to share financial concerns with their peers than with their family."  

Friends spend money with each other regularly in a way they don’t with family. HyperJar's shared jars feature gains more interest as friends pool their money for everything from bills to holidays, saving up and spending together. 

Megens believes another reason young people aren’t turning to banks is because they’ve heard so many horror stories of paying back high-interest loans. "Young people, and women in particular, have been bombarded with credit and debt products for years, often via their social media feeds," continues Megens. "Even if they’ve not had debt problems, they will know people close to them who have. This has led to an increased savviness about 'lifestyle debt' and an awareness that it’s emotionally, as well as financially, draining to consistently owe money – however small – to credit card and BNPL [buy now, pay later] companies."

This is true for 29-year-old Anya*, a talent acquisition manager from Leeds. "Seeing my ex-boyfriend get into over £3,000 of debt from Wonga loans has put me off taking out any kind of loan or bank account with overdraft interest," says Anya. "I paid it for him but he kept putting off paying me back and took out even more loans in secret; it became sort of an addiction." This led to the demise of their relationship, with Anya only getting her money back from his parents when they found out. 

Another reason is that some women can’t actually get loans. "At university I had five credit cards and took out so many loans and overdrafts that banks won’t let me have any more," says Tina. Even though she admits that borrowing from banks would be more stressful in the long run, Tina would prefer to use credit cards rather than her friend. "It’s a bit degrading and embarrassing constantly relying on her but I don’t have any other choice."

Fashion designer Emilia*, 30, is in a similar position. "I have a terrible credit rating because I got into a bad state of debt six years ago when I was diagnosed with cancer," she says. 

"As a 25-year-old absolutely convinced I was going to die, I had a nihilistic attitude to money and effectively bought anything, didn’t give a shit about anything and ultimately lost my job because of it." Emilia is still paying off these debts today, which meant that when she recently scored a potentially career-changing order for her brand from a highly reputable retailer, she needed to look elsewhere to fund it. 

"The company provides a 30% deposit upfront, which is an industry standard, but it basically just covers my materials," she continues. "Let alone my studio rent and wages." Emilia had business loans and funding options rejected for various reasons and it took hitting the bottom of her bank account for her to turn to her family for a loan. 

"I didn’t grow up in poverty but I’m from a solidly working-class family in West Cumbria and the idea of asking for money, even though it was a sure thing coming back, made me feel like a terrible person," says Emilia. She put it off for as long as she could but eventually asked her family for a loan while also calling in favours with her studio landlord and getting help at home from her boyfriend. Emilia never explicitly borrows money from friends and finds accepting physical items a lower hit to her pride. 

"I’ve had friends who’ve paid for things like Ikea furniture when I had to move house suddenly," she says. "Then I’d pay them back as soon as I could by selling any possessions of value, from shoes to sample sale dresses."

Emilia is right to be wary of borrowing money from friends. As well as often being an awkward conversation, friends can feel they have influence over what you’re spending the money on.

Anya, who regularly lends money to friends, explains that seeing them spend her money on items she deems frivolous can be infuriating, especially when she’s had to cut back her own spending to help. 

"On multiple occasions I’ve had £100 left for the last week of the month and lent a friend half," says Anya. "Then I see they’ve gone on a night out on Instagram or are throwing loads of expensive food into a shop we’re doing for a money-saving picnic and it’s hurtful because I’ve been really careful with mine." 

Borrowing money and not paying it back on time has placed a strain on many of Anya's friendships. "When friends haven’t stuck to my deadline, I’ve hit the bottom of my overdraft and been charged," she continues. "That becomes a further huge stress of whether I can reasonably charge them for that, too."

When Beth borrowed £30 for groceries from a friend it was no problem, but when she asked for £100 for "travel, food and a few little things" they told her that they’d rather send her a shop coupon or go shopping with her. "It felt so patronising and embarrassing," says Beth. "I needed it for rent too but I didn’t want to let on how bad my situation was so I lied and told her not to worry because my grandma had sent me money."

Beth now receives help with bills, from her phone to internet connection, from Young Women’s Trust, which provides services for women aged 16 to 30 who are trapped by low or no pay and facing a life of poverty. A recent survey by the trust found that young women are more likely than young men to be struggling with the cost of living. Fifty-two percent of young women who responded to the survey said that they are "filled with dread" when they think about their household finances.

The situation shows no sign of improving any time soon. Economists are warning that high inflation rates could last years rather than months, and forecasts predict that energy bills could soar beyond £3,300 a year when the energy cap shifts again in October. Borrowing from friends is a great sign that we’re being more open about our finances but it’s also an indication that more support is urgently needed to help those who are struggling amid the cost of living crisis.