More than 10 million families are struggling to make ends meet as the UK's economic woes continue to bite into family incomes. 10 per cent of the nation's 25 million households are under such extreme financial pressure that they have been forced to default on household debts including mortgage repayments, according to an extensive survey by the consumer group Which?
Some 2.3 million households have defaulted on a loan, bill or housing payment, and 1.5 million have taken out one or more unauthorised overdrafts or payday loans to help cover their living costs.
The difference between a loan shark and a payday lender is a licence otherwise they are not distinguishable by their brutal interest rates and their harassment of the poor and vulnerable. In less than a decade the payday industry has grown from a £100 million-a-year business to a parody of banking worth £2 billion annually. Millions had been excluded from the security, such as it was, of conventional banking and deprived access to the credit boom. But by one estimate there are 1.75 million adults in Britain without a proper bank account and nine million with no access whatsoever to credit. They became easy victims for the sub-prime hustlers and the "temporary" payday advance.
1.2 million people availed themselves of payday loans in 2009. They took out 4.1 million loans between them. Last month, meanwhile, Which? reported that almost 40% of such borrowers took the money to buy food; 20% to pay the rent; 32% to obtain electricity, nappies and such items. The "typical amount owed" was £1458, equivalent to a month's wages in this income bracket. Half said they couldn't repay their debts.
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Some 2.3 million households have defaulted on a loan, bill or housing payment, and 1.5 million have taken out one or more unauthorised overdrafts or payday loans to help cover their living costs.
The difference between a loan shark and a payday lender is a licence otherwise they are not distinguishable by their brutal interest rates and their harassment of the poor and vulnerable. In less than a decade the payday industry has grown from a £100 million-a-year business to a parody of banking worth £2 billion annually. Millions had been excluded from the security, such as it was, of conventional banking and deprived access to the credit boom. But by one estimate there are 1.75 million adults in Britain without a proper bank account and nine million with no access whatsoever to credit. They became easy victims for the sub-prime hustlers and the "temporary" payday advance.
1.2 million people availed themselves of payday loans in 2009. They took out 4.1 million loans between them. Last month, meanwhile, Which? reported that almost 40% of such borrowers took the money to buy food; 20% to pay the rent; 32% to obtain electricity, nappies and such items. The "typical amount owed" was £1458, equivalent to a month's wages in this income bracket. Half said they couldn't repay their debts.
Source
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