Justin Tomlinson is the MP for the Swindon North and Robin Walker is the MP for Worcester
We have all watched TV when the adverts come on. Quick cash quid in your pocket now, just text, call, go online, money in minutes. 5853 per cent APR representative pops up in the small print at the end. Most baulk at the high APR, yet in the 2011/12 an estimated £8 million payday loans were taken out in the UK. Recent debate has painted these borrowers as financially excluded vulnerable people, lured into borrowing money that they cannot afford to pay back.
It is important to put payday lending in perspective. A recent Consumer Finance Association survey of payday loan customers found that they fall into three main ‘groups’. Young, technology-savvy people who borrow to cover short term emergency costs; middle aged parents who borrow to cover family costs; and those aged 45-50 who borrow to support their grown up children. In each group, over 75 per cent of borrowers are employed.
What the report does not show however, are the vulnerable borrowers within each group and those that do not fit the ‘model’. Yes, they may be the minority, but they are a vulnerable minority. and it is crucial that we ensure that they are protected. They do not go to payday lenders through choice, but because they are the lender of last resort.