35% of pay day borrowers need to cover mortgage costs

New research conducted on behalf of the Debt Advisory Centre has found that 44% of people who took out a pay day loan in the last 12 months used it to pay for everyday essentials such as food, while a further 35% needed to cover their rent or mortgage.

Related topics:  Specialist Lending
Rozi Jones
6th February 2015
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Across the UK, 7% of adults – equating to over 3.5m people – say that they have taken out a pay day loan in the past 12 months. There is a clear male/female split, with 9% of men, but just 5% of women, saying that they’ve used payday loans in the past year. There is also a clear bias towards younger borrowers – 17% of 25-34 year olds have borrowed in this way, compared to 9% of 35-44 year olds, and 3.6% of people aged 45-54.

Other research from the Debt Advisory Centre found that 1 in 15 (7%) people who have unsecured borrowings are spending 50% or more of their take-home earnings on payments each month, while a third (34%) say that their repayments account for between 21% and 49% of their pay.

The recent report found that 65% of UK adults have unsecured borrowing, with borrowers spending around 20% of their take home pay on debt repayments each month.

Ian Williams, spokesman for DAC, says:

“Many people who are struggling with money problems often put off tackling them – for example, believing that if they can just borrow some money to get through this month, then things will be better next month. However, for a great many people that simply isn’t true: if you have got to the stage where you need to borrow money to buy food or pay the rent, a loan isn’t the solution - it is time to seek expert help with your finances.”

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