With many households struggling with the cost of living, Great Western Credit Union has dug deeper to find out more about an increasing trend and pain, “payday loans”. A payday loan is a short-term loan that is available to those who need a short amount of cash, fast.
However, they do carry a high interest rate, and research shows that the term “payday loans” receives an average of 77,400 UK searches every month, highlighting financial struggles in the population.
Great Western Credit Union has taken a look at data from the ONS and Google to reveal which cities have the highest payday loan demand and what role employers and HR departments could have in alleviating it.
How do the closest cities to Warrington, Liverpool and Manchester shape up?
Warrington is located between two major cities in the UK, Manchester and Liverpool, meaning that its financial dynamics are strongly influenced by both cities. Below shows the data from both cities, showcasing a varied level of median income and average number of payday loan searches:
Manchester:
- Has a median income of £722 per week
- Average number of 24 payday loan searches per 10,000 residents
- Average savings: Numbers not available.
Liverpool:
- Has a median income of £690 per week
- Average number of 12 payday loan searches per 10,000 residents
- Average savings: £15,257
One interesting point to make is that despite their geographical closeness and joint influence on Warrington, the communities in both of these areas show vastly different numbers of financial struggles. The payday loan searches differ vastly, with Manchester coming in overall 2nd in the payday loan search ranking, in comparison to Liverpool coming in 8th.
Which cities are struggling the most?
The data also reveals that certain cities are showing evidence of urban financial pressure, with Birmingham and Glasgow topping the list. The results show they have 21 searches per 10,000 people, which is among the highest in the country.
However, Glasgow has one of the lowest average savings balances (£6,419), presenting a smaller financial safety net. In the meantime, Birmingham has a greater average number of savings with a modest median income (£661 per week), suggesting people are forced to rely on savings instead, to bridge shortfalls.
On the other hand, those residents based near the cities of Manchester and Liverpool have a higher median income and are likely to have better financial resilience as a result.
How payroll savings can benefit employers and employees
Money@Work from Great Western Credit Union is a payroll savings and loans scheme that helps employees build financial resilience and reduce money-related stresses. The offering from Great Western Credit Union is only available to South West businesses but similar schemes are available to workers and employers around the country. One of the biggest barriers to long-term financial resilience can come in the form of an over reliance on short-term high interest debt, this is where payroll savings make a massive difference
