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New research shows that Britain has a hidden informal lending economy

Tuesday, August 04, 2026 — 16:04:53 (UTC)

New research shows that Britain has a hidden informal lending economy.

54% of UK adults have lent or borrowed informally within a family or friendship group in the past 12 months

Cost-of-living pressures being absorbed by families as more than one in four recent informal loans were taken to bridge a cashflow gap before payday

Two in five informal lenders or borrowers have experienced a repayment misunderstanding; the majority rely on verbal trust alone, with no written record

29 July 2026 LONDON – More than half of UK adults (54%) have lent or borrowed money from friends or family in the past year, new research from Pebblio reveals, exposing the scale of Britain’s hidden informal lending economy.

The research found that 39.4% have experienced a repayment misunderstanding, while 27.9% of recent loans were used simply to bridge a cashflow gap before payday.

This suggests that as living costs rise, families and friends are acting as Britain’s unofficial overdraft or credit line.

Pebblio is a new UK web app that helps friends and family put interest-free loans in writing, agree repayment terms and track payments. Most informal loans still rely on verbal promises or personal trust, only a small minority has any written record, which often leads to confusion and strain in relationships.

Alex Postlethwaite, a London finance director and chartered accountant, founded Pebblio after witnessing this problem first-hand. “Lending money to people you love and care about should never turn into a source of anxiety or conflict. I saw countless friendships and family ties become damaged because no one had agreed on clear terms and this left me determined to find a technological way to solve this.”

The bank of mum and dad - and friends

Britain's informal lending market is substantial and largely invisible. Nearly half of recent informal loans (47.6%) were for £250 or more.

The research finds that the reasons for loans come from helping someone through a moment of genuine hardship. An unexpected bill, a car repair, accounts for the largest share of loans. But the second-largest category is week-to-week cashflow.

Alex commented, “With inflation persistently above the Bank of England's target, energy and grocery prices well above pre-2022 levels, a cost-of-living crisis and frozen tax thresholds eroding take-home pay, it appears that friends and family are quietly absorbing the kind of short-term financial pressure that may fall to an overdraft or a payday lender. They are doing it without paperwork, without interest, and largely without any record at all which has a human impact.”

“Pebblio is built to give two people who already trust each other a way to write things down properly, so the money doesn't get in the way of the relationship.”

Key findings (Survey of 2,000 UK adults):

54% have lent or borrowed money from friends/family in the last 12 months. 39% of those have had a repayment misunderstanding or dispute. 28% of loans were made to bridge a cashflow gap before payday. 48% of loans were £250 or more. 64% would consider using an app to manage such loans.

Pebblio is not a lender and never handles money. It’s a newly launched UK app that helps people put informal loans into a clear framework. Users can create an agreement specifying the loan amount and date, customise the repayment plan (weekly, monthly or flexible), and then both parties e-sign the contract. The borrower pays offline (bank transfer or cash) on the agreed dates, either party marks as paid in the platform and Pebblio also sends both sides automated email reminders.

Pebblio provides a simple written agreement for interest‑free loans, a repayment schedule everyone accepts, and gentle reminders if a payment is due. It is underwritten by an immutable shared audit log so there can be no ambiguity as to what has been agreed.

Notes to Editors

Methodology: Research was conducted on behalf of Pebblio via a consumer research platform across two independent waves of 1,000 UK adults each (October 2025 and December 2025). Samples were nationally representative across the twelve UK ITL-1 regions. Combined sample: n=2,000. All figures are reported as the combined two-wave average, except the measure of likelihood to use a dedicated app, which was asked of the December 2025 wave only (n=1,000).

About Pebblio

Pebblio is a UK web application that helps friends and family formalise interest-free loans between themselves. It is a record-keeping and documentation tool, not a lender, credit broker, debt collector or payment service provider. Pebblio is fully bootstrapped and is operated by Pebblio Limited, Company No. 17089441, registered in England and Wales. For more information, visit pebblio.co. Alex Postlethwaite is the sole founder of Pebblio, a UK app that helps friends and family put informal loans into a clear framework that removes the awkwardness - with a clear written agreement, completely customisable repayment schedule and automated email reminders. He built the platform after recognising how often money lent between people who love each other quietly sours relationships when repayment terms are never actually agreed or timings slip and believing there must be a solution to this. Alex is fully bootstrapping Pebblio and is a Chartered Accountant.

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Source: Company press release.

Categories: Reports and research