money
A new report has called on the government to take action against "rip-off" payday lending companies, as personal debt levels in the UK hit ?158 billion.
Credit market expert Carl Packman's paper for the Centre for Labour and Social Studies reveals that:
? The payday lending industry was worth just over ?100 million in 2004 and is now somewhere between ?2-4bn today.
? Over a million people took out payday loans in 2012.
? The bill for outstanding personal debt reached ?158 billion in February 2013 under the Government?s watch.
? The average payday loan taken out grew from ?200 in March 2012 to ?335 in September 2012.
The paper - 'Boom-time for legal loan sharks: How deregulation, market failure and a crisis in wages has led to the rise of payday lenders' - also shows that the under 25s were the largest group to be borrowing from payday lenders in September 2012. In March 2012 they had been the lowest.
In his report, Mr Packman calls for:
? The end of self-regulation for payday lenders.
? A cap on the total cost of credit and the amount of times a person can take out loans to service existing loans.
? Provision for tailored debt advice.
? Restrictions on planning permission for payday lenders on the high street.
Mr Packman said: ?Many of these loans are being taken out to purchase food and other essentials or pay bills ? not the outcome of financial imprudence that some would have you believe. Workers are finding it increasingly difficult to top up their declining wages with mainstream credit and because of that personal debt is rising to severe levels.
"The very fact that people are having to borrow money for essentials, food, bills and housing, suggests an urgent need for government to act quickly on assessing the causes of such dangerous rises in personal debt, and what can be done to regulate the industry itself to make it more responsible.?
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.