In July, we reflected on new evidence looking at people’s experience of using illegal lenders. Today, we are publishing our secondary analysis of the FCA's Financial Lives Survey, 2020 highlighting how demographic factors and financial pressures combine to increase the risk of borrowing from loan sharks. We find that having borrowed from legal high-cost lenders in the past 12 months greatly increases this risk and call for direct measures to counter cost-of-living pressures as the means to counter it.

Estimates of illegal moneylending use vary widely, from just 200,000 to over 1 million. But whatever the true scale of the problem, the main drivers are likely to be poverty and over-indebtedness rather than a "credit vacuum". Carl Packman reflects on the latest evidence.