'Change in attitude' needed to help the poorest

By Sarah Engle, Thu 29 Dec 2011 - Published in Loans

A Scottish Labour leader believes an increase in the number of credit unions as well as a change of attitude can help the poorest in the country.

Following the costly Christmas period, many families are turning to high-interest payday loans in a bid to quell the amount of debt they have amassed over the festivities. It was recently revealed that many young people aged 25 to 34 are more likely to take out these types of loan.

The Scottish government estimates that 85,000 people in Scotland borrow money to see them through tough financial difficulties. However, firms can charge up to 2,000 per cent APR on the payment and, since 2004, 150 illegal practices have been shut down.

Johann Lamont, Scottish Labour MP, said: "Many families see payday loans as the only option to get through the New Year but this is a deeply expensive way of managing bills and can cause misery. I fully support the efforts of my Labour colleagues at Westminster who are putting forward laws to cap interest rates on loans."

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