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

News
people
News
John Rees-Evans is standing for Ukip in Cardiff South and Penarth
news
Arts and Entertainment
Bianca Miller and Katie Bulmer-Cooke are scrutinised by Lord Sugar's aide Nick Hewer on The Apprentice final
tvBut Bianca Miller has taken on board his comments over pricing
Life and Style
Approaching sale shopping in a smart way means that you’ll get the most out of your money
life + styleSales shopping tips and tricks from the experts
PROMOTED VIDEO
News
Elton John and David Furnish exchange marriage vows
peopleSinger posts pictures of nuptials throughout the day
News
in picturesWounded and mangy husky puppy rescued from dump
Sport
David Silva, Andy Carroll, Arsene Wenger and Radamel Falcao
football
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant - LONDON

    £20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

    SThree: Graduate Recruitment Consultant

    £20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £35K - £45K: SThree: SThree Group have been we...

    Day In a Page

    Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

    Clocks, rifles, swords, frogmen’s uniforms

    Surrounded by high-rise flats is a little house filled with Lebanon’s history
    Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

    Four months after the bombardment, Gaza’s wounds are yet to heal

    Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
    Gastric surgery: Is it really the answer to the UK's obesity epidemic?

    Is gastric surgery really the answer to the UK's obesity epidemic?

    Critics argue that it’s crazy to operate on healthy people just to stop them eating
    Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

    Homeless Veterans appeal: Christmas charity auction

    Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
    Pantomime rings the changes to welcome autistic theatre-goers

    Autism-friendly theatre

    Pantomime leads the pack in quest to welcome all
    The week Hollywood got scared and had to grow up a bit

    The week Hollywood got scared and had to grow up a bit

    Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

    Panto dames: before and after

    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
    Thirties murder mystery novel is surprise runaway Christmas hit

    Thirties murder mystery novel is surprise runaway Christmas hit

    Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
    Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

    Anne-Marie Huby: 'Charities deserve the best'

    Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
    The botanist who hunts for giant trees at Kew Gardens

    The man who hunts giants

    A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
    The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

    The 12 ways of Christmas

    We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
    Birdwatching men have a lot in common with their feathered friends, new study shows

    The male exhibits strange behaviour

    A new study shows that birdwatching men have a lot in common with their feathered friends...
    Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

    Famous diaries: Christmas week in history

    Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
    From noble to narky, the fall of the open letter

    From noble to narky, the fall of the open letter

    The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
    A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

    A Christmas ghost story by Alison Moore

    The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'