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
Explore More