Can online payday loans be trusted?
Most payday loans lenders are authorised and regulated by the Financial Conduct Authority (FCA), but you should always
check their details on the
FCA register and make sure that the website listed there matches the website you are applying on.
Keep in mind as well that broker websites are less safe as brokers tend to sell your information rather than provide
the loan themselves.
Payday loans during the cost of living crisis
In September 2022, Channel 4 released a documentary called
“Broke: Britain’s Debt Emergency”. The documentary uncovered some alarming statistics about the current cost of
living crisis:
-
In the last 6 months, 1 in 4 people borrowed to pay for food and energy bills
-
It is predicted that 1 in 5 people will be in poverty by next year
- Prices are rising faster than any time in the last 40 years
- 1 million people are borrowing from illegal loan sharks, that’s a 233% increase from previous estimates.
- 45% borrow from a loan shark to cover everyday living costs.
With the cost of living continuing to rise in the UK, more people and being pushed into debt – many for the first time in their life! The Financial Conduct Authority released figures indicating a rise in the number of people experiencing financial difficulties. This number grew from 8% in May 2022 to 11% in January 2023. The documentary claims that UK households are facing the largest collapse in living standards since records began. For the average consumer, this means less monthly disposable income. For example, according to Citizens Advice data, last year a Citizens Advice assessment client on UC had £15 a month at the end of each month, but this year they have -72p.
Should I apply for a loan if I am struggling with the cost of living?
No. The worst thing to do when you are struggling to cover everyday costs is to borrow high-interest loans. Instead,
you should reach out to Citizens Advice or Stepchange to get free and impartial fianncial advice.
Get free advice now