Like much of the western world, the United Kingdom has faced some serious hardships over the past few years. The economic recession has hit the people hard as jobs are moving overseas and the austerity measures of the nation’s government start to take root. Many of the people in the U.K. are turning to payday loans in order to fill the gaps during these tough times. In fact, recent studies have shown that around 20% of the total lending market is in payday loans. This does not bode well for the millions of people who are struggling to live with their debt. Some people are calling it the "United Kingdom payday loan trap".

How Much Money is in Payday Loans?

In the United States and the U.K. there are huge payday loan industries that generate millions of dollars in revenue. In fact, in the U.K alone a total of 242 million British pounds were generated in revenue in 2011. That is a huge amount for a small island that doesn’t have nearly the same population as the United States. Nonetheless, the amount of people who are using payday loans has grown rapidly over the past few years.

According to research, there were only 300,000 payday loan users in 2006 in the United Kingdom. By the time the recession had hit, in 2009, the figure had quadrupled to 1.2 million. Estimates put the figure around 3 million today, which is ten times the number of people only six years ago. The industry is generating a lot more revenue, but the number of users involved will help to propel that number even further in years to come.

Growing Payday Loan Debt in Britain

There is no denying that payday loans are convenient for families that don’t have the financial means to take care of themselves at all times. After all, a surprise visit to the doctor or car repair will set poor families behind if they are living on a tight budget. In order the fill the gap, a quick payday loan can easily do the trick. However, the industry is getting quite large in the United Kingdom for the simple reason that the economy is not showing any improvement.

There are many British people who have found jobs, gotten help with payday loan debts, and eventually got a payday loan settlement. The entire country is not falling into a debt spiral, but it is important that authorities take a look at how big the industry is becoming before it consumes too many people.