soaring pump prices force drivers to resort to payday loans
Four pump price swings in the past 18 months, each temporarily adding up to £5 to the cost of a small tank of fuel, have forced one in six drivers (16%) to raid savings, owe money to the bank, pawn possessions or take out a payday loan, AA research reveals.
A further 20% have seen fuel price surges push their budgets to near breaking-point. Even drivers from high managerial and professional backgrounds have felt the pinch, with 15% admitting that their spending plans have nearly crashed off the road on at least one occasion since the spring of 2012. Twice as many semi and unskilled workers (31%) saw their finances nearly snap.
Drivers, whose finances have been caught out by rising pump prices, have on at least one occasion in the past 18 months resorted to:
Fuel price desperation has created a new and sinister twist to the phrase ‘driven into debt’
Edmund King, president of the AA
“Fuel price desperation has created a new and sinister twist to the phrase ‘driven into debt’. The research responded to by 23,824 AA members has exposed the heavy impact of fuel price surges and which groups of drivers are particularly vulnerable,” says Edmund King, the AA’s president.
“Last week, the AA laid bare the consumer backlash to rising fuel prices, showing that yet another pump price swing crashed UK petrol consumption in July down to winter levels. This Populus survey moves the microscope from the forecourt to the home and finds unsettling evidence of fuel market-inspired deprivation.
“Young drivers with little capital to fall back on and who are likely to be on lower pay scales are clearly suffering the most - one in 50 of them have put themselves in real financial danger by taking out a payday loan. But, they are not alone.
“The survey reveals that one in 50 of middle-aged AA members, aged 35 to 44 years, have also turned to high-interest lenders to counter crippling fuel price surges. These drivers are probably saddled with family costs and mortgages or high rents, and their predicament is even more disturbing.”
(6 September 2013)
The survey was conducted by Populus between 8 and 14 August 2013