One in ten Brits plan to take out payday loan

A new survey has revealed that a desperate one in ten Britons are planning to take out a payday loan within the next six months. According to the poll of 2,000 UK adults, conducted on behalf of insolvency experts R3, 11 per cent are "likely" to opt for a quick cash loan to tide them over, a rise of 50 per cent on last year.

One in ten Brits turning to payday loans
One in ten Brits turning to payday loans

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Struggling young people are increasingly turning to payday loans to get by, with one in four admitting they would be forced to turn to high-interest, short-term borrowing.

Worryingly, some 13 per cent of those who opted for a payday loan, which can be charged at an APR of up to 4,214 per cent, were unable to cover household essentials like food, clothes and utility bills as they tried to repay the debt.

Lee Manning, president of R3, told The Sun: "Repaying debt ahead of food is a million miles away from the supposed purpose of these loans. If money has to be spent paying back these debts ahead of food, clothing, gas or electricity, they are in fact only exacerbating a difficult situation."

Meanwhile, the Daily Mirror, which launched the End Legal Loan Sharking campaign this year, revealed that payday lenders are already targeting cash-strapped Brits worried about the expense of Christmas.

Campaigning Labour MP Stella Creasy said: "All the evidence shows families are being squeezed more than ever.

"Many already have to choose between heating their homes and putting food on the table. t is worrying to see legal loan sharks targeting these families this Christmas as they'll leave them in an even worse position in the New Year when they call in the debts."

The Mirror reports that 50 per cent of borrowers are unable to repay the high-interest payday loans, and a third have been visited by debt collectors over the last 12 months.

Are you struggling to repay a payday loan? Should the Government limit the amount interest lenders can charge? Leave your comments below...