Payday lending in the UK: the regul(aris)ation of a necessary evil?

Research output: Contribution to journalArticlepeer-review


Colleges, School and Institutes

External organisations

  • Coventry University
  • University of Oxford


Concern about the increasing use of payday lending led the UK's Financial Conduct Authority to introduce landmark reforms in 2014/15. While these reforms have generally been welcomed as a way of curbing 'extortionate' and 'predatory' lending, this paper presents a more nuanced picture based on a theoretically-informed analysis of the growth and nature of payday lending combined with original and rigorous qualitative interviews with customers. We argue that payday lending has grown as a result of three major and inter-related trends: growing income insecurity for people both in and out of work; cuts in state welfare provision; and increasing financialisation. Recent reforms of payday lending do nothing to tackle these root causes. Our research also makes a major contribution to debates about the 'everyday life' of financialisation by focusing on the 'lived experience' of borrowers. We show that, contrary to the rather simplistic picture presented by the media and many campaigners, various aspects of payday lending are actually welcomed by customers, given the situations they are in. Tighter regulation may therefore have negative consequences for some. More generally, we argue that the regul(aris)ation of payday lending reinforces the shift in the role of the state from provider/redistributor to regulator/enabler.

Bibliographic note

Karen Rowlingson, School of Social Policy, University of Birmingham, Edgbaston, Birmingham, B15 2TT (corresponding author) Lindsey Appleyard, Centre for Business in Society, Coventry University, Priory Street, Coventry, CV1 5FB Jodi Gardner, Corpus Christi College, Merton Street, Oxford, OX1 4JF


Original languageEnglish
Pages (from-to)527-543
JournalJournal of Social Policy
Issue number3
Early online date3 Feb 2016
Publication statusPublished - Jul 2016


  • credit, financialisation, payday lending, regulation, welfare, insecurity