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Peer2Peer Finance News | July 24, 2019

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Zopa: Parents borrowing from children’s piggy banks

Zopa: Parents borrowing from children’s piggy banks
Tim Evershed

ZOPA research has found that two fifths of parents have admitted to raiding their children’s piggy banks to borrow cash.

Parents surveyed by the peer-to-peer consumer lender confessed to borrowing money from their kids with a fifth taking over £250 a year.

However, 80 per cent of parents said they will also be giving their children cash as a Christmas present this year.

Nearly a quarter of children can look forward to a gift of up to £100, whilst a lucky three per cent will be receiving more than £500 in cash.

“As we move towards a more cashless society it’s interesting to see that it’s the kids who are the ones who are cash rich today,” said Andrew Lawson, chief product officer at Zopa.

Read more: Zopa raises £60m in largest funding round to date

“There is still a clear need for hard cash and parents are often having to borrow from the ‘kiddy bank’ – an age-old form of P2P lending.

“Zopa wants to help people manage their money more efficiently but a barrier to this is the stress and anxiety that a lot of people feel about money. Understanding the value of money from an early age is one step towards having a better relationship with money in the future.”

Nearly a quarter of parents surveyed said they give their children cash to help to teach them the value of money.

Read more: Zopa to increase senior female headcount by five per cent

Two thirds of parents agree that the amounts their kids are gifted now are higher than those they used to get as children.

“It’s no surprise to me that gifting money to children is so popular,” said Kalpana Fitzpatrick, founder of blog Mummy Money Matters, which partnered with Zopa on the research.

“In a world where we’re much more careful when making purchases, it makes sense that we may want to pass this on to our children and give them the chance to make their own informed decisions about what they spend their money on.”

Read more: Zopa narrows losses despite banking arm investment