Millions turn to payday loans, claim insolvency experts
Millions of Britons are likely to take out a high-interest loan in the next six months to last them until payday, a group of insolvency experts claims.
R3, which represents "professionals working with financially troubled individuals and businesses", bases its claim on interviews with 2,000 people.
John Lamidey, of the Consumer Finance Association, which represents payday loan companies, disputed the figures.
Downing Street says it is trying to bring in an industry code of practice.
Some 60% of those surveyed worried about their level of debt, and 45% struggled to make their money last till payday, R3 said.
R3 says the survey reveals money worries at the highest level it has ever recorded, and consumer bodies have called for tougher regulation around payday loans.
Payday loans are small, short-term unsecured loans designed to tide people over until they get their salary.
The survey found 45% of those questioned struggled to make it to pay day, rising to 62% for 24-44 year olds.
One in six are so-called "zombie debtors", who are only able to service the interest on their debts.
The payday loan companies are now a £2bn-a-year business, says BBC correspondent Andrew Hosken.
If the money is paid back promptly on the next pay day, this type of lending can be cheaper than paying an unauthorised overdraft or a credit card charge.
However, if the loans - some charging interest rates of more than 4,000% - are rolled over, debts can quickly escalate. One woman told the BBC she borrowed £300 and now owes £720.
Steve, from Lancaster, took out several payday loans in the summer when he fell behind with paying off bills and personal debt.
"I took a payday loan out to cover it thinking I'd pay it off the month after and it would all be history," he told BBC 5Live.
"Of course, like a lot of people, I got myself into a little spiral where I couldn't pay it and borrowed a bit more, and then I couldn't pay that so I borrowed a more. I ended up with maybe half a dozen of them.
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