For those with a poor credit rating, or those who can’t get an overdraft, pawnshops are, very often, the only place where those in need can raise funds. That, of course, relies on them having something left to pawn.
The 2022 report carried out by the Social Market Foundation revealed that over 1 million people had turned to a pawnbrokers in a bid to raise funds. Speaking to pawnbrokers across East Anglia, East Anglia Bylines discovered that the number of customers they were seeing had increased. In January this year The Big Issue reported that “people are increasingly pawning their belongings for a quick injection of cash as the cost of living crisis continues to spiral.”
Pawning to pay for essentials
We spoke to Tracey, manager at Cash Inn Ltd, a family run business with shops in Beccles, Great Yarmouth, and Lowestoft. Tracey is manager at their Lowestoft branch. When asked about whether number of customers were rising, Tracey explained: “More people are using the shop, and increasingly people are pawning their possessions for essentials, including food gas and electricity. We noticed that Christmas and this winter, paying for utilities, has hit our customers hard.
“I find that people are also using us to pay for vet bills, if they have pets.”
While Tracey’s pawnshops only takes jewellery, other pawnbrokers across the region will lend money on electrical goods, fishing gear and a whole variety of other belongings. As long as the goods aren’t stolen and are in good condition, a customer can use these to raise funds.
Workers embarrassed about poverty
Tracey also explained that many visiting pawnbrokers were embarrassed at finding themselves in this situation. The vast majority of those using a pawnbroking service are working but still finding that ends don’t meet, and by the end of the month their food cupboards are literally bare.
In general people have two options with this company, they can either buy back goods within 28 days, or the loan can be repaid over seven months. Interest is applied to both choices, but the seven-month loan is more flexible. For the 28-day option if you borrowed £100, you’d have to repay £125. The seven-month loan for a £100 would see the customer repaying monthly interest of £12.80. The reassurance for many with this option is that their possessions are safe for the seven months and will not be sold on.
For many, pawnbrokers are their only option. Some loan companies that offer, for example, to lend £700 repayable over three to six months for those with bad credit, total repayments will come to £1,179.05, on a fixed rate repayment of 185.39%. Pawnbrokers offer a more affordable service for those in need of their services.
Tracey has discovered that many of her clients weren’t familiar with the local foodbank. When she hears that someone is in dire need she tells them about this life-saving service. She has even visited the foodbank and introduced herself to them to discover their criteria. Many of her customers had thought the foodbank wasn’t for them as they weren’t in receipt of benefits. “So many are working at the moment, and their wages just aren’t enough. With bills to pay and feeding and clothing their children, people are finding it hard.” Referring to the 1980s in conversation, Tracey ended by saying, “It’s all a bit déjà vu.”
The National Association of pawnbrokers is currently working on new research looking at pawnbroking in 2023.