Nine million people in the UK don’t have access to credit from banks, so have no choice but to use rip-off lenders: The cost of a loan of £100 with a company such as Provident Financial can be £49.50 – nearly 50 per cent of the amount borrowed, or an APR of 545.2 per cent. A loan from a payday lender costs even more; to borrow £100, lenders charge £25 for one month – an annual percentage rate of nearly 1300 per cent. These lenders charge whatever they want – the sky is the limit.

So far the Government has failed to implement proper legislation that would stop these predatory lenders. This report recommends several actions that policymakers could implement now to tackle the problem, such as introducing a UK version of the Community Reinvestment Act seen in the USA, a cap on the total cost of credit, the abolition of credit dependency and an investigation into the impacts of interest rate caps on poor households.