One in seven households has relied on high-interest credit like payday loans or unauthorised overdrafts to pay their rent or mortgage in the past 12 months, according to homeless charity Shelter.
Around 7 million households are sinking in to quicksand of debt that could end up with them needing help to stop eviction or repossession.
Shelter revealed 2% of households – about a million people – had resorted to at least one payday loan to fund living costs in the past year, with some lenders charging up to 4,000% APR.
Campbell Robb, chief executive of Shelter, said: “These shocking findings show the extent to which millions of households across the country are desperately struggling to keep their home.
”Turning to short-term payday loans to help pay for the cost of housing is totally unsustainable. It can quickly lead to debts snowballing out of control and can lead to eviction or repossession and ultimately homelessness. Every two minutes someone in Britain faces the nightmare of losing their home.“
Shelter is urging borrowers struggling to pay their bills to seek debt advice sooner rather than later.
A range of debt solutions are available to help those with money problems – ranging from informal agreements with lenders to reschedule borrowing (financial management plans) to insolvency solutions like IVA (individual voluntary arrangements) or bankruptcy.
Meanwhile a separate survey by the Post Office reckons around 12 million borrowers will put day-to-day bills like rent, mortgage payments and grocery shopping on their credit cards this month to compensate for overspending during the festive season.
The findings showed borrowers are more reliant on their credit cards in this new year than last year, with over 2 million (7%) people planning to put more on plastic this month compared with January 2011. Four out of 10 (38%) say they plan to spend up to £200.
—- ENDS —-
Notes to editors:
- Money Debt and Credit is one of the UK’s fastest growing financial solution companies.
- The company was founded in 2006 on the belief that every client has the right to appropriate financial advice. Since then we’ve gone from strength to strength and have helped thousands of people with a variety of financial solutions.
- We offer a range of services including Financial Management Plans, Loans, Mortgages, Full & Final Settlements, Bankruptcy, Investments and Pensions.
- Specialties: IVAs, Financial Management Plans, Loans, Mortgages, Trust Deeds, Full and Final Settlements, Bankruptcy
For more information or debt advice contact:
Money Debt and Credit
45 Clarendon Road, Watford, WD17 1SZ
Tel. 0800 16 999 46
Image: Idea go
