Problems with payday loans

Some of the most vulnerable residents in Tayside and Fife are among the 20% of Scots struggling with payday loans.

A new survey has shown people in Scotland are twice as likely to have the financial burden of short-term loans than the rest of the UK population.

SOME OF the most vulnerable residents in Tayside and Fife are among the 20% of Scots struggling with payday loans, writes Graeme Bletcher.

A new survey has shown people in Scotland are twice as likely to have the difficulty financial burden of short-term loans than the rest of the UK population.

Manager at Arbroathbased Angus Independent Advocacy, Suzanne Swinton, said people with learning difficulties or mental health issues were increasingly more likely to take out a loan without fully understanding what they are agreeing to.

She added: “It is something we are finding is happening to more people, not just in Angus but in Scotland.

“People are being exploited financially and it is a real concern.

“Our clients can often be taken in by these schemes to get money quickly and then end up having to pay tremendous amounts back.”

The Personal Debt Snapshot study from insolvency trade body R3, found seven per cent of Scots prioritised repayments on payday loans over spending on food, with the same percentage cutting back on clothes for themselves and their families.

The greatest debt concern for Scottish respondents was credit cards, with 34% stating that is what worries them most, compared with mortgage payments (33%) and bank loans (21%).

Almost half said they are worried about their current levels of debt, with 20% believing their financial situation will worsen in the next six months.

Margaret Lynch, chief executive of Citizens Advice Scotland, said:“We certainly recognise the picture of people who are struggling to make ends meet and who are pushed further into debt by extortionate payday loans.

“Every CAB in Scotland is dealing with case after case of such people every day.

“Often people are in tears when they come through the door as they simply can’t afford to pay their bills and they feel they have nowhere else to turn.”

Payday loans appear to be more popular among 18- 24 years, with the survey showing 26% of that age group are likely to seek one in the next six months, compared to just 4% over 45.