Payday loans are driving the nation’s poorest into depression

We all know that payday loans are bad for our pockets, but new research shows they’re even worse our health. A report launched today from the Royal Society for Public Health (RSPH) found that the poverty premium is having a serious impact on the wellbeing of society’s poorest.

The Life on Debt Row report highlights how the UK’s growing high cost credit providers are causing a destructive effect on public health, including driving alcohol and tobacco consumption amongst the most vulnerable.

Payday loans were found to the be the worst offender, followed by unauthorised overdrafts, doorstep loans and weekly payment stores.

High cost credit providers are causing a destructive effect on public health    

Nearly half (49 per cent) of credit users said they drink more alcohol as a result of their debt with this rising to three in five (62 per cent) among payday loan users.

Launched in parliament today, the report is the first time a major public health body has documented the health and wellbeing impact of poor credit. Changes to benefits such as the controversial roll out of Universal Credit has also been raised within the report. With four in five credit users (79 per cent) saying the changes led to them using more credit than they would have otherwise.

The RSPH is now calling on the Government and the lending industry itself to protect the health of those users including a call to end targeted marketing to vulnerable individuals and health warnings on all credit agreements.

The big day has arrived: the launch of our #LifeOnDebtRow report on high cost credit and health. Thanks to @carolynharris24 for hosting us in Parliament this afternoon, with @michaelsheen and members of the @EHCCAlliance. Check https://t.co/rlquILfHfj from 4pm! #endhighcostcredit

— Royal Society for Public Health (@R_S_P_H) March 21, 2018

The report comes as ready and equitable credit for the poorest now becoming a mainstream topic of conversation, with actorMichael Sheen launching his own battle against high-cost lenders on March 20.

The End High Cost Credit Alliance, founded by the actor himself, brings a number of industry bodies together including politicians, charities and social enterprises to tackle the financially crippling interest of high-cost credit and raise awareness of fairer lending initiatives.

The poverty premium and fairer lending has been on the mind of The Big Issue Group for some time. “Luckily,” says Maayan Keren Zur of Big Issue Invest, “responsible lenders do exist.” She tells how investment from the Big Issue’s investment arm is helping ethical personal lenders like Moneyline, Fair For You, and Street UK.

• How Big Issue Invest is making lending fair

In parliament, The Big Issue founder John Bird has introduced the Credit Worthiness Assessment Bill in a bid to help millions of lenders get access to fair credit and to prevent society’s poorest being clobbered by the poverty premium.