Written by: Emma Lunn
Financial wellbeing platform FairQuid claims that 59,037 members of NHS staff borrow £45.1m in payday loans every year.
The firm’s research, based on data from loan comparison website CashLady, shows that borrowers have typically been working for the NHS for 48 months when they first take out a loan.
It found the typical NHS payday borrower earns £1,529 per month and seeks to borrow just under a week’s wages (£351).
According to the FCA, payday loan borrowers typically repay 1.65 times the amount of the initial loan, which means that NHS staff could be spending three quarters of the total borrowed (£29.3m) on loan fees.
Vishal Jain, founder and CEO of FairQuid, said: “It’s important that we don’t place blame on the borrower, the employer or the payday loan companies. In this case, we know the NHS is an extremely responsible employer, but a lot of people with a regular income don’t have any savings and need extra money for unforeseen events.”
The data also showed that NHS staff make up the largest proportion of UK payday loan applicants at 3.47 per cent.
Other employers cited in the research include Tesco (1.4 per cent), Asda (0.9 per cent), Sainsbury’s (0.7 per cent), and the British Army (0.7 per cent). According to the FCA, 5.4 million payday loans are used by 1.7 million people in the UK every year.
“How can we expect workers in the NHS to provide critical public services while they have money worries? Employees bring this stress to the workplace which leads to lower productivity, decreased engagement and higher attrition. Those who are in full-time, permanent jobs should be rewarded for their length of service and hard work with fairer access to emergency funds,” said Jain.
FairQuid partners with not-for-profit credit unions to provide financial products. It’s “wellness platform” evaluates the risk profile of individuals based on their length of service with an employer, behavioural data and performance history, and allows users to take out a loan and create savings goals.