It has been revealed that employees of the National Health Service collectively borrow on average a staggering £45 million in payday loans each year, according to recent statistics published in the past week.
What does the data reveal?
The analysis on the payday loan industry was carried out by fintech company FairQuid and based on data by CashLady, and it revealed that NHS employees made up the highest proportion of payday loan applications across the country. This equates to about 3.5% overall.
The main reason that was given as to why the applicant had decided to take out a payday loan was to pay bills.
Taking into account additional data from the Financial Conduct Authority (FCA) that indicates 1.7 million people in the UK have taken out approximately 5.4 million payday loans (with an estimated value of £1.3 billion). That means around £45 million is borrowed by approximately 59,037 members of the NHS.
NHS staff and loan fees
Research conducted by the FCA shows that on average, a person taking out a payday loan could end up paying 1.65 times the amount of the original loan. Consequently, NHS employees could be spending a collective total of £29.3 million on loan fees.
NHS payday borrowers
The data has also revealed some other typical characteristics of the average NHS employee taking out a payday loan.
For example, the average NHS applicant to a payday lender will have usually worked in the NHS for at least 48 months before making an application to borrow money.
Meanwhile, in terms of the average amount borrowed by NHS staff, it works out to be just under a week’s wages (approximately £351 – the average NHS payday applicant earns just under £1,529 monthly).
The research follows a very similar pattern to the study that was carried out last year by the same comparison site, which revealed that NHS were more likely to apply for a payday loan than any other works in London, Bristol or Cardiff, and they were also applying for more loans nationally than other company worker’s elsewhere.
What other employers had staff using payday loans the most?
It wasn’t NHS that was the only employer most likely to lead its staff to turn to payday loans. The payday loan study also found that workers for Amazon, EE, and the British Army were also more likely to be payday loan borrowers.
Other British companies, such as the supermarkets Sainsburys and Asda, were also ranked highly on the list of staff that was taking out payday loans.