Payday loan requests double in first week of January
THE NUMBER of people applying for short-term loans in the first week of January doubled compared to the same period last month, reveals new research.
49 per cent of UK adults in full-time employment regularly exceed their monthly budget, while one in four have no ‘rainy day’ money set aside for unexpected costs, according to the survey commissioned by peer-to-peer payday lender The Money Platform.
And one third of the 2,000 respondents admitted that they regularly rely on credit cards and bank overdrafts to make ends meet.
The findings reaffirm recent statistics which show that unsecured consumer credit has soared in recent months, fuelled by low interest rates and muted wage growth.
Even higher earners are struggling to live within their means. The survey found that 40 per cent of people who earn more than £51,000 a year regularly exceed their monthly budget.
“The middle of January can be a struggle for anyone, but particularly after the expense of Christmas and New Year,” said Charles Balcombe, co-founder of The Money Platform.
“The purchase of expensive gym memberships and the start of holiday booking season also takes its financial toll. Blue Monday, as it has become known, finds a huge number of Brits out of pocket and in need of a financial boost.”
Londoners were the most likely to exceed their monthly budget (55 per cent), while those in the East Midlands were the least likely (39 per cent).
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Women aged between 31 and 40, living in the south west and earning between £25,000 and £35,000 per year were the least likely demographic to have any emergency money stored away.
In contrast, men aged over 61, living in the south east and earning more than £51,000 were the most likely to have money put aside.
The Money Platform received full Financial Conduct Authority approval in January 2016, making it the only fully-authorised P2P payday lender. It officially launched last month, in time for the Christmas period.
It offers a representative APR of 165 per cent and investors can expect returns of around 12 per cent.