High Cost Credit ‘Hurting Over a Million Vulnerable Brits’
July 27, 2017
A lack of access to affordable credit is making life more and more difficult for many thousands of UK consumers and households.
That’s according to the debt help charity StepChange, which has published a report arguing that there should be more government support for people who are struggling to make ends meet.
The charity’s latest research suggests that there are more than 1 million people around the UK who rely on high cost credit every month to pay their bills and cover their most essential expenditures.
Of that million or more people, half are understood to be spending money they’ve borrowed at considerable expense on food and grocery shopping.
Around a third are estimated to spend their borrowed money on fuel and water bills, while a quarter are believed to head into the red to cover their housing costs.
The current situation, along with a lack of access to affordable credit, is said to be pushing many people into cycles of borrowing and debt that they cannot break free from without great difficulty.
With this in mind, StepChange has called on the government to do more to support no-interest loan initiatives and credit unions, who it says could be doing much more to provide affordable loans to struggling consumers throughout the UK.
The charity also wants to see greater government support given to developers of financial technologies that could meet the demand for low-interest loans and employer-based borrowing options.
“Without significant support from government…financially vulnerable households who need to borrow will still be left with financial products which don’t serve their needs and risk pushing them deeper into hardship,” said Laura Rodrigues, a senior policy advocate for StepChange.
In addition to the 1 million or so Brits who are estimated to be using high interest debt to cover their essential costs, a further 7.7 million are believed to have turned to some form of credit to cope with household expenditure over the past 12 months.
StepChange counts payday loans, instalment loans, doorstep loans and the deals offered by rent-to-own stores as falling into the “high cost credit” category.
If you are based anywhere in Scotland and struggling to cope with your debt management problems then Scotland Debt Solutions can help. Contact your nearest SDS office to arrange a free initial consultation.
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