One in four people coming to Citizens Advice have a debt problem, the charity has said.

It argues payday lenders are setting a ‘debt-trap’ for struggling families.

Gillian Guy, Citizens Advice’ chief executive, said: “In the battle to make ends meet people are turning to short-term loans just to get by. A lack of checks, high interest rates and fees means what is supposed to be a quick fix turns into a long term nightmare.

“It’s not just payday lenders that are preying on the worst off. Citizens Advice expects up to 60,000 log book loans to be taken out this year – 61% more than in 2011. The industry brings together the worst of payday lenders and bailiffs with its threatening tactics, high interest rates and failure to check if people can afford to repay loans.

“People need more options for short-term credit. There is a gaping hole in the market which allowed the boom in payday loans. The time for a responsible alternative in the form of a micro-loan is long overdue.”

Recent analysis from the charity shows that money worries are affecting those in and out of work. People who are self-employed are just as likely to seek help from Citizens Advice with a debt problem as those who do not have job. Just last week the latest employment figures revealed self-employment had hit an all-time high.

Guy added: ““It is important creditors pay to help people who are in debt. The FCA levy on consumer creditors should add to money for debt advice via the Money Advice Service, not be used to reduce the amount existing contributors have to give.”