Trends in the high-cost short-term credit market - January 2019

We have published new data on insights and trends in the high-cost short-term credit (HCSTC, also known as ‘payday lending’) market.  

Lending volumes in the market remain well below the levels seen in 2013, but have risen since 2016. Over 5.4 million loans were made in the year to 30 June 2018, with 10 firms accounting for around 85% of new loans. The costs of borrowing are lower than before the price-cap and have been stable since - on average, borrowers are due to repay 1.65 times the amount they borrow.

Borrowers with HCSTC loans are predominantly young, with 37% of payday loan borrowers and 29% of short-term instalment borrowers aged between 25 and 34. 37% of HCSTC borrowers are tenants (including council tenants) and 26% are living with parents.

This is the first time that we have published analysis in this market based on data from firms’ regulatory returns. We collect data from firms about HCSTC lending via our Product Sales Data (PSD). We use the data to monitor the HCSTC market and inform our supervision of firms and other regulatory functions. Our analysis also draws on the Financial Lives Survey 2017.

In April 2014, the FCA assumed responsibility for regulating consumer credit activities. Firms initially received interim permissions to operate while they were applying for FCA authorisation. Firms begin submitting regulatory reporting to us once they are authorised. 

We have also introduced new interactive data visualisation functionality in this report which allows you to engage further with the data. Find out more about FCA Data.