There are plans to tackle the dominance of the payday loan industry, with the Chancellor of the Exchequer, Philip Hammond, announcing in the autumn Budget plans to create a no-interest loan scheme.
It is anticipated that this scheme, which is modelling itself on an a similar scheme that has been implemented in Australia, will be offered to over 3 million people on low-incomes in the UK. The aim is to not only help these people to reduce the cost of debt that they may have accumulate through high-cost credit lenders, but to also offer a more affordable alternative to payday lenders. It also hopes that it can avoid the most vulnerable in society getting into unmanageable debt in the first place, and in the worst case scenarios, turning to loan sharks in order to try and settle the amount they owe.
