A growing number of people are taking out payday loans in order to tide them over, a new report indicates.

Research from moneysupermarket.com suggested that the rise in uptake of such loans has been "astronomical" and is indicative of the rising cost of living.

"As disposable income is being squeezed through increases in the cost of food, fuel, utilities and general living necessities, these loans are increasingly used to help those on a tight budget," commented Tim Moss, head of loans with the site.

He added that loans can be a good source of short-term funds for people looking for an income boost, comparing the resource to taxis by pointing out that they should be an occasional measure, rather than a lifestyle habit.

Between September and October, the number of people taking out payday loans increased by 6.8 per cent, with the increase growing to a high of 68.9 per cent by February.

The Bank of England's monetary policy committee this month voted to maintain the base rate at five per cent.
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