Reliance on payday loans

Reliance on payday loans

Homeless charity Shelter has warned that almost one million people took out a payday loan over the last 12 months to help them cover their mortgage or rent.

The charity warned that around 7.8million Britons are struggling to keep up with their rent or mortgage payments.

This marks an increase of 44% over the past year. Four per cent of rent or mortgage payers they surveyed said they had fallen behind with their payments, which would equate to 1.4million people at a national level.

Around seven per cent of those surveyed said they used an unauthorised overdraft to help them cover their costs, and one in 10 of these people said they did so every month.

Rents have increased over the last year as increased numbers have been stuck in the rental sector as they are unable to meet lenders’ toughened criteria or raise the typical 20 per cent deposit needed.

Households are set to come under further pressure this winter from soaring energy bills, following a string of price hikes by companies.

Campbell Robb, chief executive, Shelter, said: “It’s shocking to think that so many families will be starting the New Year with a huge weight hanging over them, trapped in a daily struggle to keep their home.

“Payday loans may seem like a quick fix, but the huge interest charges mean things can quickly spiral out of control.”

Mr Robb urged anyone affected to seek advice as soon as possible.

General News

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