Written by: Emma Lunn
Figures from the Financial Conduct Authority (FCA) show the number of payday loans fell 31.7% year-on-year, while the number of payday lenders fell by a quarter last year.
The Wagestream income stream company obtained the figures from the regulator using freedom of information laws.
Figures from the FCA show that there were 861,781 payday loans taken out in the first three months of this year. This figure represents a decrease of 31.7% (399,339) compared to the 1,261,120 recorded by the FCA in the same quarter in 2018.
Payday loans registered for the first quarter of this year represent £ 240 million in credit. The high interest rates mean these borrowers will have to repay £ 410million, according to the regulator.
FCA data also revealed that the number of active payday loan companies fell 24.5%, from 94 to 71 in the first quarter of 2019.
Wagestream said the research “paints a scorching picture for the predatory payday loan industry.” The industry has come under scrutiny in recent years for scamming clients with high fees and interest.
Wagestream campaigns against payday poverty and accuses the payday lending industry of trapping low-income workers in a damaging cycle of credit dependency.
His solution is to give workers early access to a percentage of their accumulated wages when they need it in exchange for a fee of £ 1.75. He says this solves a major cash flow problem for UK workers that is created by monthly salary payments, forcing many workers to take high-interest, short-term credit options.
Peter Briffett, CEO and Co-Founder of Wagestream, said: “This sharp collapse in the number of payday loans underwritten is fantastic news for UK consumers who, to their credit, are becoming aware of the cost and toxicity of this form. loan. is.
“Consumers are becoming increasingly savvy and the backdrop to this collapse in high-cost and payday loans is a more general slowdown in the overall amount of consumer credit taken out, as evidenced by the latest Money & Credit report from the Bank of England. This has been the course of the game since the European referendum.
“However, the loss of appetite is most noticeable in payday loans and it’s fantastic to see this parasitic industry finally starting to contract.”