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.

April will see further pressure piled on households whose finances have been shattered in recent years. With the economy teetering on the brink of recession too, we need to both reduce prices and boost demand. A VAT cut, as many are calling for, could help.

Employer Salary Advance Schemes (ESAS) and loans provided with the security of 'first call' on wages are expanding. Whilst collecting repayments directly from pay helps reduce the cost of borrowing, there are concerns that the products could harm some customers. In this blog we urge providers to ensure advances and loans are affordable and for mechanisms to be put in place so financially distressed customers can easily request a suspension of payments. We also call for further research to be conducted into the impacts of the products.

Following reports of a possible Government U-turn concerning the regulation of Buy Now Pay Later, we provide further details of the link to credit card debt and argue that should be subject to the same rules.