A new report produced by the insolvency trade body R3 has suggested that people living in Scotland are facing greater debt problems than anywhere else in Britain.
The report, R3’s quarterly debt snapshot, showed that 13 per cent of Scottish people had taken on extra debt in the last few months, in the form of loans, increased overdrafts and credit card debts. In the rest of Britain, this figure was just 12 per cent.
The research also found that 43 per cent of Scots struggle to make it to payday. Whilst this was 3 per cent less than the figure recorded for the rest of Britain, it was found that 200,000 Scottish people had taken out payday loans (small, short-term loans designed to cover the borrower’s bills and
expenses until the next payday) to cover their budgetary shortfall in the last year.
R3 revealed that one in five Scottish people who had taken out these payday loans struggled to pay back what they owe, which is considerably more than the one in ten Brits who admitted the same.
John Hall, who is an R3 Scottish council member, said:
“It is extremely worrying that such a large percentage of people are struggling to make it to payday and that many are using payday loans to bridge the gap.
“These loans tend to have high interest rates and often those who use this type of credit find themselves in a vicious debt cycle, especially if they then experience a sudden job loss.”
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