Claims, based on interviews with 2,000 individuals and businesses, are that 60% of those surveyed are worried about their level of debt with 45% struggling to last to payday.
Insolvency experts R3 say that the survey reveals money worries are at the highest level it has ever recorded and are calling for tougher legislation around payday loans.
Payday loans are small sort-term unsecured loans designed to tide people over until they get their weekly or monthly pay. However, if the customer cannot pay back the loan when it falls due then it is rolled over resulting in massive interest payments, in many cases doubling the initial sum borrowed.
Last month the Citizen’s Advice Bureau warned that the number of people running into debt as a result of payday loans has quadrupled in two years.
The Citizen’s Advice Bureau and the consumer watchdog Consumer Focus are also calling for tighter legislation. Concern is around the number of separate loans individuals are taking out on top of other existing debt, some individuals with loan numbers in double figures.
The Consumer Credit Counselling Service advised that payday loans should treated as a last resort and if you are cannot clear the loan when due then seek debt advice.
For more information read my article Money tip #125 – The dangers of Payday Loans.
Free help and advice on dealing with debt problems
If you are worried at all about your debts then here is the official government list of where you can get free help and advice on dealing with debt.