Payday loan problems soaring, says debt charity
StepChange reported that between January and June 2014 it handled more than £72 million worth of payday loan debt
The number of people struggling with payday loan debts is still soaring. New figures published today have revealed a climb of almost 50 per cent in those forced to seek help after falling into debt problems because of payday loans in the first six months of the year.
Debt charity StepChange reported that between January and June 2014 it handled more than £72 million worth of payday loan debt that people were having difficulty repaying, up from £51m in the first six months of 2013.The number of people it helped in the period rose to 43,716, up from 30,762 the previous year.
StepChange chief executive Mike O’Connor said: “The figures show that the payday market all too often fails to treat customers fairly, especially those in financial difficulty.”
The charity believes there is a case for a tougher total cost cap than 100 per cent of the value of the loan, which has been proposed by the City Watchdog, the Financial Conduct Authority.
“While the FCA’s proposed price cap is a crucial step forward, there is still much work to be done to ensure that payday loans can no longer plunge people into a cycle of unsustainable borrowing and entrenched financial hardship,” said Mr O’Connor.
The Competition and Markets Authority found the average initial payday loan taken out is £260. Meanwhile the average StepChange client with payday loan debt has an income (net) of £1,305. That means that someone with just one payday loan debt which reaches the 100 per cent cap would end up owing a substantial part of their income.
That, in turn, could lead to them taking out further borrowing and getting into deeper financial difficulty, the charity warned. It has called for a separate cap on default costs to encourage lenders to lend responsibly.
- 1 Drugs Live cannabis trial: Hash is less harmful than any other drug, expert claims
- 2 Have sex with your iPad thanks to the new sex toy no-one asked for
- 3 The 'sex selfie stick' lets you FaceTime the inside of a vagina
- 5 Why you're almost certainly more like your father than your mother
Out-of-touch MPs ‘don’t get it’, says ex-Civil Service chief
Mark Zuckerberg: Facebook CEO's one simple test for who to hire
Bali nine: Welcome to 'Execution Island' – the Indonesian holiday resort where foreigners are sent to die
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
iJobs Money & Business
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...