What is the poverty premium in credit?

People in poverty pay more to borrow money. This is because people on a low income are more likely to have a low credit score and therefore be seen as more of a risk to lend to.

Credit is an essential service for smoothing out the ups and downs in income that we all experience.

Using high cost credit

Such as short term high interest loans
and credit cards

What we're doing

No Interest Loan Scheme

Fair By Design has partnered with Fair4All Finance and Toynbee Hall on the No Interest Loan Scheme (NILS) pilot, the first of its scale across the UK. NILS aims to make credit available at zero interest to those who cannot afford interest payments.

It has received £3.8m in funding from Treasury and up to £1m of lending capital from each devolved administration. Pending the results of the pilot, we would like to see schemes like this rolled out across the UK.

More about NILS

Affordable Credit

We’re calling on the Government to drive a step change in the provision of affordable credit. The Government should explore a UK-style Community Reinvestment Act, following the example of the US, to increase the availability of credit to those on low incomes.

For more read our manifesto

News And Publications - Credit

Find all our our evidence, reports and consultation findings

A plan to tackle the poverty premium and make markets work

Date published: 27/03/24

Read our report with Fabian Society on how the next government can reduce the poverty…

13 organisations call for ‘Help to Repay’ scheme

Date published: 25/10/23

Fair By Design has written to the Chancellor, Jeremy Hunt, urging him to introduce a…

Calls for a ‘Help to Repay’ scheme to support people struggling with energy debt 

Date published: 13/06/23

We join charities writing to Grant Shapps MP calling for a ‘Help to Repay’ scheme…

Finance Innovation Lab: Public wants politicians to act now on ‘unfair’ bank services

Date published: 29/03/23

A large majority of the UK public wants action to tackle unfairness in provision of…

The Cost of Living and Levelling Up

Date published: 22/06/22

Read our report on how much the poverty premium costs each parliamentary constituency.

Discussing the value of Credit Unions

Date published: 04/03/22

Director of Fair By Design, Lucie Russell, comments on BBC news on Credit Unions

Fair By Design and partners delivering No Interest Loan Scheme (NILS) pilot

Date published: 06/09/21

Fair By Design is delighted to be working with Fair4All Finance and Toynbee Hall on…

People with certain protected characteristics more likely to pay a poverty premium

Date published: 23/02/21

People on low incomes and with certain protected characteristics are more likely to be paying…

The poverty premium: a customer perspective

Date published: 23/11/20

Read Fair By Design’s report which found that low income households were spending the equivalent…

Explore all news & publications

Real Stories

Our work is led by the voices of those who experience the poverty premium.

More real stories

Elspeth’s Story: Credit and the poverty premium

Date published: 06/06/23

Credit and the poverty premium: Elspeth’s story