By Mark Fairlie

Employees of UK local authorities are quickly becoming one of the most financially challenged groups of workers in the UK today, according to the latest findings from leading credit broker CashLady.

Local councils, schools and hospitals have come under criticism following CashLady’s May Consumer Credit Index report as the figures show their employees are among the most common group of employed people turning to payday loans to make ends meet.

Consumer trends and named employers

CashLady’s unique Consumer City Index takes data from High Cost Short Term Credit applications across the country to create an interactive map of the real-life financial struggles faced by Brits today.

Using month on month comparisons, the Index shows the number of emergency finance applications made through, the average loan request amount, and the employees’ average monthly income.

May’s findings will make for uncomfortable viewing for UK city councils, as it effectively names and shames the top employers in each city with the most employees who have applied for short-term loans. The results show a few key themes:

  1. Sainsbury’s
  2. NHS
  3. Tesco
  1.  NHS
  2.  Glasgow City Council
  3.  Tesco
  1.  Leeds City Council
  2. NHS
  3. Asda
  1. Asda
  2. NHS
  3. Edinburgh Council
  1. NHS
  2. Liverpool City Council
  3. Asda
  1. Convergys
  2. NHS
  3. Education Authority

City councils and government departments featured as one of the top three employers in seven of the nineteen UK cities in the survey, with the NHS named as a top employer in sixteen cities.

The findings of the May Consumer Credit Index suggest that the employees in these public sector roles are the most cash-strapped workers in the UK; collectively applying for emergency credit more than any other group of workers.

The pay squeeze on public sector workers

In a poll in 2017, fellow loan comparison site Readies found that of those in employment seeking a payday loan, more than 25% worked in public sector roles such as nurses, teaching assistants, and council staff.

Readies’ operations manager Stephanie Cole said whilst payday loans often receive a bad reputation, they are now “part and parcel” of many people’s lives due to wage growth falling behind inflation.

“The pay squeeze, particularly on public sector workers, will only serve to increase the number of people turning to payday loans who are already struggling with rising fuel, food and transport costs,” she added.

Back in January, the House of Commons voted against abolishing the 1% pay rise cap on public sector workers’ wages, continuing the almost decade-long stagnation of wages for employees in the sector.

Whilst more than a million NHS staff, firefighters, police and prison offers were given a pay rise earlier this year, as the CashLady Index figures show, the struggle has continued for many.

The top three ‘loan purposes’ given in the Consumer Credit Index ranged from ‘unexpected costs’ to ‘paying bills’, suggesting some are relying on short term credit just to make ends meet.

More UK Public Sector Workers Applying for Emergency Loans Than Ever Before

‘These employers have a responsibility’

Chris Hackett, Managing Director of CashLady said that by publishing the Consumer Credit Index report, they hoped to “focus a spotlight on the continual struggles of British employees”.

He went on to say that CashLady’s data continually reveals that many short-term loan applicants work within some of Britain’s largest organisations, suggesting these firms are not doing enough to support their employees.

“These employers have a responsibility to ensure their employees are sufficiently remunerated to meet basic living expenses,” Hackett added.

“We hope our consumer Index will help governments and employers wake up to the struggles often faced by their constituents and workforce respectively.”