Santander claims one million people in the UK are using payday loans to cover the cost of household bills in a typical month
The figures are based on research commissioned by Santander and conducted by Opinium Research in June this year with 2,011 UK adults.
Respondents were asked to estimate how much they take from a number of sources each month to pay for bills.
The average across all sources for all who use a form of debt is £259.07.
Out of the 2,011 respondents 557 said they use one of a number of sources to cover monthly bills which equates to 28% of the sample. And out of these 45 said they specifically used a payday loan to cover their monthly bills which equates to 2.2 per cent of the sample size.
Based on the UK’s adult population of 49.9 million, Santander says this equates to 1.2 million people.
These respondents estimated that they take an average of £152.78 from payday loans or £1,833 per year. £1,833 x 1.2 million gives us an annual total of £2.2bn.
Santander UK’s banking director Reza Attar-Zadeh says: “In an ideal world, household bills should be one of the first costs to be covered when payday arrives, but as the research highlights, this isn’t always possible.
“The cost of living is going up, driven in part by the rising cost of household bills, and as a result, millions of people are regularly borrowing money to make ends meet which cannot be sustained in the long-run.