37% of Debt Advisory Centre’s (DAC) new clients in 2013 owe money to payday lenders, a 106% increase since 2011, when 18% of DAC’s new debt solution clients had payday lenders amongst their creditors.
The numbers are based on analysis of all UK clients starting any debt solution with DAC in the calendar year.
Although the average number of payday loans held by each client has remained fairly constant, moving from 2.7 in 2011 to 2.9 in 2013, these loans now account for a much greater percentage of the average client’s total debt. In 2011, this figure was just 7% – but in 2013, it stands at 15%.
DAC says this increase has been driven by two separate factors. While the average new DAC client owes less in total, they actually owe more to their payday lenders – the average payday debt of a new client has risen 17% in two years, from £1,380.64 to £1,615.05.
Melanie Taylor of Debt Advisory Centre said: “The figures provide solid evidence of what many people already know – that payday loans are increasing in popularity at a remarkable rate. What is, perhaps, more surprising is that whilst the number of clients who run into problems with payday loans has doubled, we’ve seen little increase in the number of payday loans per client – or in the total value of those loans.
“If you are struggling with debt repayments then I’d urge you to seek debt advice sooner rather than later. Interest and charges can quickly mount up but can usually be stopped once a new arrangement with lenders is in place.”