Speaking Out for Fair Credit
Hello, I’m Michael Sheen
Ever had to borrow any money? This amount, that’s £500, repaid on the doorstep
over 52 weeks will typically cost you what? £100? £200? £400? £430? £435? £436.
That is £936 in total That’s pretty common,
If you are one of the hundreds of thousands of people who borrow £500 over 52 weeks from
a high cost lender You pay back well over £900.
The people on the lowest incomes, living in the most disadvantaged neighbourhoods pay
a poverty premium We can do better
At some point in our life, most of us have to borrow money
fix our washing machine, to buy our children a school uniform or to pay an unexpected bill
For many of us the standard way is savings or maybe a credit card, bank loan or overdraft.
The cost of borrowing is usually low and affordable However, for 13 million in the UK with thin
credit files or poor credit histories standard sources of credit are simply not available.
They are financially excluded from main stream credit. What does this mean? Well it doesn’t
mean that people don’t borrow money. They still need to pay the unexpected bill or repair
the fridge. If their wages or benefits don’t stretch far enough, they need to find this
money from somewhere. Instead, millions of people will have to borrow from high cost,
short term firms, like doorstep lenders, payday loan companies or rent to own shops. In 2016,
these firms lend £4.5 billion to nearly 4 and a half million people in the UK.
In total, people in the UK currently owe nearly £9 billion to high cost credit companies.
This is a massive issue in this country. Often it means that those with the least pay the
most for all sorts of things, insurance, utility and credit.
This is the poverty premium in action. But don’t take my word for it. Let me introduce
you to Lyndsey, Razia, Zoe, Michael, Marie I don’t think I’d get it from a bank, I’m on benefits, I’m a single parent so I don’t think i’d get it from a bank and her son Jack, and April. They’ll tell
you what it means to have to borrow money when your choices are limited.