Call for £450m levy on payday loans industry

A £450 million levy on the consumer credit industry should be used to create a "new generation" of affordable lenders to take on Britain's legal loan sharks, leading think tank IPPR has said.

View all 2 updates ›

Call for one off levy on payday loans companies

A £450 million one-off levy on the payday loans industry should be used to create a "new generation" of affordable lenders to take on Britain's legal loan sharks, a leading think tank has said.

Eight million people use the payday loans industry annually, figures show. Credit: PA

A report by the Institute for Public Policy Research (IPPR) called for a levy to be used to compensate for the "direct financial harm" caused by the £180 billion consumer credit market.

Revenue from the levy would then be used to mobilise not-for-profit institutions to compete with firms such as Wonga, Quick Quid and Payday Express.

Not-for-profits and credit unions could be hosted by the Post Office, and lend "small amounts at affordable rates to ordinary people", the report said.

UK households collectively owe nearly £160 billion in unsecured consumer credit, with low-income households "vulnerable to exploitation by unscrupulous firms".

More top news