Jubilee festivities may leave hard-up families in debt

Many will be celebrating with money they haven't got, and payday lenders are happy to come up with the cash.

It's billed as the time the nation gathers together to celebrate 60 glorious years of our current Queen, but it could leave many in financial turmoil. Street parties on Monday will be full of happy smiles, but many will be putting on a brave face knowing they can't afford their party.

Estimates about how much people will blow on their festivities vary. Research from the discount website VoucherCodes suggests that people will spend an extra £102.65 over the Jubilee holiday. Meanwhile Santander reckons Brits will spend an average £83 each on food, drink and decorations for the party.

But with family debt levels increasing by three-fifths in the last year, according to Aviva, it seems clear that many will be spending money they haven't got. The insurer's Family Finances Report published this week revealed that the average family now owes £9,314.

The bulk of the debt – which has climbed 58 per cent in the last 12 months – is on credit cards, overdrafts and personal loans, but hidden away in the report is the damning statistic that the average family now owes £702 to high-cost payday lenders.

That figure is worrying as many people only turn to payday lenders as a last resort. If they owe hundreds of pounds in expensive credit, they may be on a disastrous debt spiral.

And this week shocking evidence emerged of some lenders looking to cash in on the Jubilee by encouraging people to borrow to pay for their celebratory fun.

Payday Power – which quotes an APR of 1940.5 per cent – published a Jubilee article on its website which concluded: "For anyone that doesn't want to miss out on these celebrations, applying for a payday loan could be the answer."

Meanwhile rival lender Payday Bank – which has an APR of 1,737 per cent – published its own article which suggested: "If you want to boost your Jubilee spending pot, a same day loan could provide the cash you need."

Firms encouraging people to get into debt to fund a party appear to be acting totally irresponsibly. The news brought a sharp response from one leading debt charity.

"Payday lenders should definitely not be using the Jubilee as a way of marketing their loans," said Matt Hartley of the Consumer Credit Counselling Service. "Payday loans are an extremely expensive way to borrow, and this kind of debt can quickly spiral out of control."

When the article was pointed out to Payday Bank by the BBC, it took it down and apologised, saying: "It is not up to the standards we set ourselves with regards to responsible lending and brokering."

The Independent was unable to contact Payday Power, which is a trading name of a company called MSM Credit, whose only address is a Post Office box at a Royal Mail building in Mill Hill in north London.

Meanwhile a coin expert has warned of the dangers of investing in Jubilee commemorative money. "History shows that these coins don't hold their purchase value, and because their prices are highly inflated above the metal content value, even getting close to your money back is practically impossible," warned the coin and gold dealer Lawrence Chard.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Life and Style
Couples have been having sex less in 2014, according to a new survey
New Articles
i100... with this review
Holly's review of Peterborough's Pizza Express quickly went viral on social media
footballTim Sherwood: This might be th match to wake up Manchester City
Arts and Entertainment
musicHow female vocalists are now writing their own hits
New Articles
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Blahnik says: 'I think I understand the English more than they do themselves'
Arts and Entertainment
Michelle Dockery as Lady Mary Crawley in Downton Abbey
TVInside Downton Abbey series 5
Life and Style
The term 'normcore' was given the oxygen of publicity by New York magazine during the autumn/winter shows in Paris in February
fashionWhen is a trend a non-trend? When it's Normcore, since you ask
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam