Are you struggling until payday?

When you’ve got essential costs to meet, payday can seem a long way off. Below are some options that you may wish to explore.

Ask for a pay advance

If you need money before payday, it’s always worth asking your employer if they’ll give you an advance on your wages. Be honest, explain that you are having a cash-flow problem and how an advance would help you manage.

Your employer may even have a hardship loan system for employees who are struggling financially.

If you’re claiming benefits and waiting for your first payment, or if your money is late you can ask your Jobcentre Plus adviser for a short-term advance.

Normally you’ll need to pay this back out of your benefit payments.

Using an authorised overdraft

If you have a current account you might be able to get an authorised overdraft from your bank.

These can be fairly expensive (although there are some interest-free overdrafts) but it will usually be cheaper than using a payday loan - as long as you stay within the overdraft limit.

An unauthorised overdraft, which is an overdraft not approved by the bank, can be very expensive and lead to serious money problems.

You can phone RCN Direct to book an appointment with a specialist debt adviser if you’d like advice on dealing with overdraft fees. There may be options available that would reduce the costs you’re paying.

Borrowing from a credit union

A much more affordable alternative to a payday loan is a loan from a credit union.

There’s a cap on the amount of interest they can charge – 3% a month or 42.6% a year APR for England, Scotland and Wales, 1% a month or 26.8% APR for Northern Ireland.

See Borrowing from a credit union on the Money Advice Service website. 

Deciding on the best type of credit for you

The Money Advice Service has created a simple guide to choosing between different types of credit, including loans, overdrafts and credit cards:

What’s the best credit option for you?

Borrowing from family and friends

Borrowing emergency money from a family member or a friend can help you avoid the risks that go with payday loans.

But do make sure that both you and the person you’re borrowing from take the time to:

  • Put your agreement in writing
  • Work out a budget and a repayment plan
  • Discuss what will happen if you’re late paying it back or don’t repay it at all

Food Banks

Most food banks in the UK are run by the Trussell Trust, a charity run with the help of volunteers and local communities. Someone who knows about your situation, like a doctor or advice worker, may be able to give you a referral form so you can access support from a food bank. A food bank could then provide you with some food to last for a few days or more.

You can find your nearest Trussell Trust Food Bank using their interactive map.

Help from your local welfare assistance scheme 

If you’re struggling to pay for essentials like food, heating and clothes you might be able to get help from a local welfare assistance scheme.

They vary from area to area and can provide, for example, vouchers, pre-payment cards, furniture or white goods and food bank referrals.

The schemes are all means-tested so if you’re due to be paid, your income could mean you don’t qualify for this type of assistance.

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