New data has revealed that 15 percent of short-term loan requests are to cover scheduled bills, according to Welendus, an ethical, fully FCA approved peer-to-peer short-term credit provider.
Since the launch of the platform in January, Welendus has received close to 35,000 applications for short-term loans, with over 5000 of these to cover household bills; including 2400 for household utilities.
With E.on, NPower, and British Gas announcing a second price hike for customers this year, bringing the average annual cost to £1205, the number of people requiring financial assistance with utilities is expected to rise as winter approaches.
While 42 percent of loan requests were made to manage surprise bills, the fact that nearly one in six applications were made to tackle scheduled expenses highlights the severity of the financial difficulties many in the UK face, as real wages remain stagnant and the cost of living continues to rise.
These issues are not only affecting income-poor households, as 77 percent of loan applicants are in full-time employment; with a significant proportion earning above the average UK salary. These households will also see little benefit from Ofgem’s cap on high value default energy tariffs, as those on standard tariffs, and customers paying by cash or cheque, can expect to save just £5 a month on bills when the cap comes into effect in December.
Nadeem Siam, founder and CEO of Welendus, said, “The majority of loan applications we receive come from those working full time jobs with long hours. The current economic climate, combined with a high cost of living and near-constant commodity price hikes, has meant that even those working and on good salaries can be left without enough cash for scheduled bills.
A huge percentage of the UK population don’t have savings, and we aim to provide a simple and ethical resource for emergency cash flow problems,”
The post One in Six Short-Term Loan Requests are to Cover Scheduled Bills appeared first on The Fintech Times.
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