New FCA cap could 'wipe out payday lenders within a year'

Under new rules, borrowers will never have to repay more than twice the amount they borrowed

Sign outside The Money Shop on Brixton High Street
(Image credit: Dan Kitwood/Getty)

Payday lenders could be wiped out within a year, analysts have warned, after the City regulator announced a new cap on interest and fees.

New Financial Conduct Authority rules, to come into effect on 2 January, will cap interest and fees at 0.8 per cent a day and cap default fees, the charge for failing to repay the loan on the due date, at £15.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up
To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us