For all of us who were not born with a silver spoon in our mouths or have not been lucky enough to scoop the Lotto jackpot, it’s safe to say we’ve all been in a position, at one time or another, where we’ve at least considered lending a few quid to see us through a sticky patch or considered a short term loan to last us until the next payday.
When we’re young and just starting out on our own, that instance can be more often than not; being inexperienced in the ways of finance, it’s very difficult to know whom to turn. Your folks can’t bail you out every time and the amounts you want to lend are perhaps too small for a bank to even consider, let alone the fact that, without some sort of credit history you have no credit rating. Without a credit rating, you can no longer start to build a credit future, let alone a history (how does that work?).
Given that backdrop, it’s easy to see why short term loans have become such a prominent feature of today’s society. A shallow economy has put a stop to the historical milestones that accompanied your late teens:
1. 16 national insurance,
2. 17 driving license,
3. 18 credit card,
4. 19 university/job.
Nowadays, with auto insurance so high, your #2’s gone down the swanny, credit card companies only lending to those who have money (yeah, another big ????) so #3’s out and with so few jobs about or having to stump up £9k for Uni, you’re lucky to get an apprenticeship at 19, and that’s after you’ve done two years’ FE at college, sixth form or academy which has more or less put the mockers on #4. And as for getting a foothold on the property ladder, well – current predictions are that a whole generation is going to miss out on being first-time home-owners without anything but a shared mortgage.
This is a very vicious circle. Children are staying at home longer because, for any of the above reasons, they cannot afford to move out. Even if they’re on an apprenticeship, they cannot be considered to be bringing in a liveable wage, which is putting more and more pressure on the household budget.
For teenagers who see their friends in the latest designer gear or with the latest gadget, they expect their parents to deliver at least some, if not all, of the goods so that they’re not ridiculed by their peers. Where does that parent turn?
If they’re on a low income, there’s little chance of getting promotion as companies are still looking at cutting back and overtime is just two four-letter words joined together in the plight of the UK economy.
Literally every aspect for the lower income bracket of society is pointing them towards short term loans, as there is nowhere else to turn to provide at least a little luxury in this grim shadow of a rotten global economy.
According to one recent study, 3.5M people will apply for a instant cash loan or other type of quick cash advance in order to please one member of the family; it has even been suggested that over a quarter of existing pay day loan customers are using the facility to put food on the table.
Based on the evidence above, is it any surprise?