Half the nation live off payday loans

New research suggests that nearly half of the population regularly struggle to make it to payday as payday loans become a reality for many in the UK.

The latest research from the insolvency trade body R3 found that 3.5 million Brits are considering taking out a payday loan over the next six months. Thousands face a debt hangover in the New Year as the cost of Christmas adds to the financial pressure on UK households.

The research found that of those who have taken out a payday loan, a staggering 60% of them regret their decision and 48% of them believe the loan has made their financial situation worse!

Only 13% of people believe their payday loan had a positive impact on their finances.

Frances Coulson, R3 President commented; “Payday loans are not the best way to resolve debt struggles. We know that many who take them out find them to be a negative experience, often escalating financial troubles.

ìA new group of ëzombie’ debtors – who currently pay only the interest charges on their debt and not the debt itself – has also been identified by R3’s research. One in six individuals is able to pay the interest on their debt rather than paying off the debt itself. This breaks down into 11% who are only servicing debt on their credit cards, and 9% who are only paying the interest charges on their overdraft.î

Many are turning to borrowing as the cost of living spirals out of control. This could lead to serious debt problems though. As debt concerns grow, savings will dwindle for a number of Brits. The research found that nearly two thirds of people are concerned about their debt levels. Currently, over 40% of the nation is saving less than usual.

If you are concerned about your debt problems, you could seek you debt advice.

Compare debt management solutions with Money Expert.

Leave a Reply

Your email address will not be published. Required fields are marked *