Cost of Living Crisis sees Loan Sharks Thrive

Back to all Motions

2024 National Women's Conference
13 October 2023

Conference In the past 3 years over three million people have turned to illegal money lenders (loan Sharks) and as the cost of living continues to bite into 2024. An extra 1 million vulnerable people and families are expected to turn to illegal lenders as the safe high street lenders turn them away due to cost of living crisis.

Conference they are being forced to turn to these illegal money lenders as they see themselves face further financial hardships, with those from marginalised backgrounds disproportionately feeling the effects of the cost-of-living crisis. Research done by not-for-profit organisation Fair4AllFinance has found that the loan sharks have gone upmarket, targeting-lower income workers with a median income of £20,000 – £24,999.

Borrowing and debt is far from gender neutral. Women are more likely than men to claim social security benefits, more likely to be in low-paid, part-time and insecure work, more likely to be providing care for children/family members and more likely to have to make up for cuts to services through unpaid work. As women’s incomes are generally lower over their lifetimes this leaves them more vulnerable to short term financial problems or income shocks making them more likely to have to rely on borrowing and debt to make ends meet.

The majority of our Unison members are women who fall into this wage bracket due to nature of their job roles. Many, who are already on tight budgets are now facing not being able to pay their bills, juggling between rent/mortgage, heating /lighting, travel cost for work against food on the table.

These illegal money lenders are known to use tactics of befriending and lulling people into trusting them. Reports have shown that mothers at school gates have been targeted by women offering to loan them money which then emerges that these are loans with high end interest rates, there is still so much stigma around talking about money, debt and financial issues.

Pre-pandemic, the Office for National Statistics (ONS) data shows that women are consistently more vulnerable to poverty and debt. 35% of women reported it was a struggle to keep up with bills some or most of the time, 26% of women said they ran out of money by the end of the month and 29% of women said they would not be able to make ends meet for a month or less if they lost their main source of income. Women have lower financial wellbeing, have fewer retirement plans and smaller pension pots than men as well as being less likely to save regularly (56%) compared to men (63%). More women (52%) have never put their money into an investment product compared to 37% of men.

The Tory governments have implemented years of austerity measures that have gutted public services, and let’s not forget Boris Johnson’s government cut the £20 per week uplift to Universal credit and is now considering cutting childcare costs by £40. These cuts impact on women who carry the burden of spreading the family income in a growing unequal economic and social environment.

Conference calls on the National Womens Committee to

1)Work with “There For You” around promoting Unison services and sign posting of confidential debt advise, use of credit unions or Employer lending Schemes with women in regions and branches

2)Work with LAOS to develop a training package around safe money awareness and budgeting that is easily accessible to all members.

3)Work to produce leaflets and Fact sheets around Illegal Money lenders and their rights.

4)Work with National Labour Link and the NEC to create campaign for tighter legislation in reporting and prosecuting loan sharks and lenders not authorised by the Financial Services Authority.