Our recent analysis of the Debt Need Survey provides important new evidence about the drivers of illegal lending. Contrary to recent reports of a 'credit vacuum' arising from regulatory interventions, we find most users of illegal lenders are 'maxed out' on legal credit. The underlying problem is poverty, which credit markets cannot be expected to address.

A new report from Fair4All Finance argues there has been a severe decline in the availability of credit for lower income households, and that we should consider "regulatory adjustments" to address it. In our response, we argue that there is little evidence of a 'credit vacuum' and that now is not the time to embolden high-cost lenders who are trying to roll back the regulatory clock.

As the cost-of-living crisis deepens, Executive Director, Damon Gibbons, questions whether credit expansion to households is part of the solution, or whether it would be better to extend help to service providers in return for commitments to keep prices down.

Even before the Covid 19 pandemic 7.2 million people (fourteen percent of the population) were heavily burdened by debt. It’s time to write down the debt.