Payday lending and public health

Our new briefing paper summarises key evidence on the potential harm of payday lending, and how it represents a risk to population health by exacerbating debt, financial difficulties and mental health problems among already vulnerable populations.

The economic recession has triggered a renewed focus on the relationship between socioeconomic factors and health, with specific concerns around the health and wellbeing of individuals accruing or experiencing personal debt.

Ten key questions are explored in the briefing paper, which seek to illuminate the current UK payday lending market:

The report author Chris Harkins, Senior Public Health Research Specialist at the Glasgow Centre for Population Health commented: 

The Financial Conduct Authority has introduced a range of appropriate reforms within the payday lending market that are designed to protect borrowers from exorbitant interest rates and fees and spiralling debt. 

I think the perception now is that the payday lending market is “fixed” – but what this report highlights is that for some borrowers, payday loans had become something of a financial safety net, however toxic. That safety net is still very much in demand, but is now much less accessible for many borrowers struggling to make ends meet. As a society we must develop viable alternatives to payday lending.

A number of recommendations are made with the intention of supporting the development of credible policy responses which mitigate potential detrimental impacts of payday lending on population health and wellbeing, in Scotland and beyond.

For more information on the findings of the report, see our media briefing (PDF).

Download Briefing paper 48: Public health implications of payday lending

Read coverage of the report in The Herald.