Damning new research has revealed public sector workers are turning to payday loans to make ends meet.
The study has been revealed a day after Theresa May narrowly defeated a bid to end the pay freeze in the House of Commons.
Labour’s amendment was defeated by 14 votes, with 309 MPs backing it and 323 voting against, with all ten Democratic Unionist Party MPs backing the Tories.
But the issue is unlikely to be laid to rest there.
A shocking poll by the UK’s largest independent loans comparison site today revealed public sector workers are turning to payday loans to make ends meet, given the sharp rise in prices and increasing the pressure on those “just-about-managing”.
Readies.co.uk, a licensed credit broker which compares business, personal and car loans, polled 8,000 anonymous visitors to its website last month who were seeking short term borrowing.
Of those in employment seeking a payday loan the highest number (27 per cent) work within areas of the public sector such as nurses, teaching assistants and council staff.
Most people seeking a payday loan stated that the money would be used towards unexpected bills as they had insufficient savings, whilst 18% per cent sought additional funds to pay off an EXISTING pay day loan.
More than one in ten said they needed the money to help with mortgage and rent commitments and ten per cent said they needed extra money to help with utility bills.
Stephanie Cole, Operations Manager at Readies said: “Payday loans have a negative stigma attached to them, but the reality is that they are now part and parcel of some people’s’ lives as the pay squeeze intensifies as wage growth falls further behind inflation.
“The pay squeeze, particularly on public sector workers, will only serve to increase the number of people turning to payday loans who are already struggling with rising fuel, food and transport costs.
“Anyone considering a payday loan – or any loan for that matter – should always seek to get the right information to make an informed borrowing decision.”
Households are coming under increasing strain as inflation hit 2.9 per cent last month, its highest rate in four years.
Public sector pay rises have been capped at one per cent, which is well below recent levels of price growth.
Staggeringly, 43 per cent of all people polled had already taken five or more payday loans out in the past year alone.
And only six per cent said that there was “no chance” or they were “not likely” to seek further short term borrowing in the future.