Pay day loans warning

Euro-MP Paul Nuttall

Rochdale MEP Paul Nuttall has warned desperate shoppers to be wary of pay day loans.

A report by insolvency trade body R3 has just revealed that potentially 3.5 million British adults would be tempted to take out a short-term loan over the next six months.

"They may be short term but they are high cost and can result in interest rates of several hundred per cent," said Mr Nuttall, UKIP Euro MP.

"This survey shows that nationally 45% of people struggle to make it to pay day but in the North West that figure is even higher at 54%.

"I know that many people are desperately struggling to make ends meet, particularly because of energy costs inflated by the green agenda, but this type of loan is very risky.

"The report has shown that 16% of those surveyed are only able to pay the interest on their debt and not reduce the amount they owe and they find themselves on a terrible treadmill.

"A third interviewed fear their financial situation will worsen over the next six months but I would urge all to think carefully before taking out any sort of loan, and particularly pay day ones," said Mr Nuttall.

"The temptation for people to spend money they don't have on Christmas can be overwhelming but they will have a long time to regret splurging out when the figures just don't add up.

"There should be a limit on the number of such loans one can take out in a year as the danger is people have to take out more and more to pay off the previous debt they can't service," he added.