Julian Knight: Payday loans need a wealth warning

Taking out a quickfire debt can rebound on you if you try to get a mortgage later on

John Charcol, one of the country's biggest mortgage brokers, has issued a stark warning to anyone thinking of taking out a payday loan. It says its advisers have seen some instances where lenders have turned down mortgage applications or trimmed back the amount they will lend if an applicant has taken out a payday loan in the past.

Mortgage lenders take the presence of a payday loan as "irrefutable proof" that a borrower is living beyond their means and is a "massive negative".

Now this is sensible on behalf of the mortgage lenders. Having lived through the time when loan decisions were being made in minutes, drive-by property valuations and huge numbers of self-certificate loans, it's good to see mortgage lenders applying logic at last.

However, what about the borrowers. Is anyone warning them about the consequences of taking out one of these quickfire loans? The answer is no. Perhaps, like cigarette providers, payday loans companies ought to carry a health warning that if you take one out you could be seriously damaging your chances of getting a mortgage.

OFT ignored

In September the Office of Fair Trading concluded its report into workplace pensions. The exhaustive report concluded that schemes offered poor value but stopped short of recommending a cap on charges.

Frankly it seemed a bit of a cop out – there is a problem but we are not going to recommend anything is done about it, went the OFT's logic. Now it seems that the government agrees that the OFT's report was a bit of a waste of perfectly good trees, because it seems we are going to have a cap on charges after all and lower than the one per cent per annum that many felt the OFT would have opted for if it had somehow miraculously grown a pair.

The announcement of a pensions cap is not just a blow to insurers charging well over the odds but to the prestige of the OFT.

Watch out

The appearance of the Big six energy companies in front of the energy select committee wasn't quite the showdown we all expected.

For starters many of the firms sent their spokespeople, including one exec sporting the bling-est Cartier watch I have ever seen, enough to make a Premier League footballer salivate. Nice move that, with people likely to die from cold this winter. It was a contest of blandness personified.

The MPs didn't help. With the honourable exception of Chris Pincher they did their usual routine of shouting soundbites (sorry, questions) which they thought would get them on the ten o'clock news.

All in all it was rather depressing and it seems plain to me that the Big Six are still being very slow on the uptake, that the game has changed and they have now replaced bankers as the nation's aunt sally.

They need a radical overhaul, not just of how they do business but also of their communication strategies.

They could start by leaving the Cartier at home in the safe.

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

Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features staging of a playground gun massacre
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
i100This Instagram photo does not prove Russian army is in Ukraine
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
Morrissey pictured in 2013
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
filmReview: Sometimes the immersive experience was so good it blurred the line between fiction and reality
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Tyred out: should fair weather cyclists have a separate slow lane?
environmentFormer Labour minister demands 'pootling lanes' for women cyclists
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
Field of broken dreams: Andy Bell visits Passchendaele
news5 News's Andy Bell visited the killing fields of the Great War, and his ancestor - known only from his compelling war diary - came to life
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

    1st Line Support Technician / Application Support

    £20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

    Team Secretary - (Client Development/Sales Team) - Wimbledon

    £28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

    Accountant / Assistant Management Accountant

    Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

    Senior Investment Accounting Change Manager

    £600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

    Day In a Page

    Dress the Gaza situation up all you like, but the truth hurts

    Robert Fisk on Gaza conflict

    Dress the situation up all you like, but the truth hurts
    Save the tiger: Tiger, tiger burning less brightly as numbers plummet

    Tiger, tiger burning less brightly

    When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
    5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

    In my grandfather's footsteps

    5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
    Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

    Martha Stewart has flying robot

    The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
    Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

    Do women cyclists need 'pootling lanes'?

    Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
    A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

    A tale of two presidents

    George W Bush downs his paintbrush to pen father’s life story
    Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

    The dining car makes a comeback

    Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
    Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

    Gallery rage

    How are institutions tackling the discomfort of overcrowding this summer?
    Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

    The day America’s love of backyard tigers led to a horrific bloodbath

    With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
    Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

    How Samuel Beckett became a French Resistance spy

    As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
    We will remember them: relatives still honour those who fought in the Great War

    We will remember them

    Relatives still honour those who fought in the Great War
    Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

    Kodak's last-ditch bid to keep celluloid alive

    Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
    Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

    Acting in video games gets a makeover

    David Crookes meets two of the genre's most popular voices
    Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

    Could smartphones soon be diagnosing diseases?

    Health Kit and Google Fit have been described as "the beginning of a health revolution"
    Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

    Can we learn to love Ryanair again?

    Four recent travellers give their verdicts on the carrier's improved customer service