There were 25,006 individual insolvencies in England and Wales from January to the end of March in 2013, down from 28,723 at the same point in 2012 and down from 25,454 in the previous quarter, according to Insolvency Direct.

In Scotland there was a drop from 4,873 in Q1 of 2012 to 3,472 at the end of this March.

Insolvencies in Northern Ireland, however, increased from 794 in 2012's first quarter to 836 at the same point this year.

These drops in Britain come despite increasing worry among activists and politicians about the rise in popularity of one-hour payday loans, which offer quick loans at high interest rates - often to people with poor credit histories who are unemployed.

The National Debtline recently saw a 94 per cent increase in the number of people asking for advice about instant payday loans from the previous year.

Joanna Elson of the Money Advice Trust said: "In 2007 - as the financial crisis began - National Debtline took just 465 calls for help with payday loans, but last year that figure had grown

Last year, LMCU became the first UK credit union to offer low interest payday loans to customers struggling to cover debts owed to other payday loan companies.

LMCU gives an interest rate of 28.6 per cent APR to its clients, compared to payday companies that can sometimes charge up to 4,000 per cent per year on short term loans.

Jacqueline Velasco, a 41-year-old mother of six who has been in the union for six years, said: "I was in a situation where I was about to be evicted from my home for rent arrears [when I] went to a meeting ... and they [LMCU] helped with a personal loan."

Camilla's visit comes as the union plans to launch an iPhone app to attract younger lenders to its business, which is trying to double its membership following government funding of over £35 million.

Lucky Chandrasekera, the organisation's chief executive, said the LMCU was seeing a large influx of members recently, with more than 250 new members a month signing up to the union.

The study, entitled Credit Crunched, argues quick cash loans provide customers with much needed short-term monetary boosts - with other, older institutions such as banks and building societies unable to match the services payday loan companies provide, according to Metro.

It also reveals 25 to 35 year-olds tend to borrow small amounts of money to pay car expenses, buy last-minute gifts or pay outstanding utility bills.

Many payday loan institutions are regularly criticised by activists and MPs for charging excessive APR rates, with some approaching 4,000 per cent/

Russell Hamblin-Boone, chief executive of the CFA, said: "Understanding our wide range of customers means that we can match their financial needs to their lifestyles, while making sure that protection is in place for them to borrow safely."

The CFA will take over regulation of the payday loan industry in April 2014, following a government threat to sanction the sector if it does not improve its image within a year.

StepChange, a charity that offers free advice to those who feel they are trapped in a cycle of debt, has said its staff at a Carlisle branch have witnessed a huge increase in the number of people seeking help after taking out high-interest payday loans, according to the Cumbria News & Star.

The number of people across the UK seeking payday loan advice from StepChange increased from 20,000 in 2011 to 36,000 in 2012 - with even higher numbers expected this year.

In north Cumbria, the average debt of those that asked for the branch's help last year stood at £13,717, while around 350 people used help offered by local facilities, up from 293 in 2011.

A spokesman for the charity said: "The average person from [north Cumbria] seeking our help has only £6 left to repay their debts after paying for essential living costs."

Payday loan companies are becoming increasingly popular among consumers with poor credit records who want a simple, easy way of getting quick cash.

Instant Cash Loans (ICL) submitted the proposal that would see The Money Shop's opening hours change from 09.30 to 17.30 to 08.00 to 20.00 to Dundee City Council, according to the Chronicle.

The application was met with a severe backlash from councillors who said extending the opening hours was not in the interest of Dundee's general public.

Councillors expressed a concern that payday loans in general are harmful, with one city councillor, Laurie Bidwell, saying: "Instant cash loans might seem to be the answer to the financial problems of those with debts, but their rates of interest are such that they often lead to compounding rather than relieving the financial problems of their customers".

Members of the planning application panel decided ICL's application should be deferred pending more information about why the opening hours extension is needed.

A spokesman for ICL said its motives have been misunderstood, saying the application is for the pawnbroker aspect of the business, adding the opening hour extension had "nothing to do with the part of our business that grants payday loans".

The regulator said it would be writing to 50 companies representing 90 per cent of the market outlining the changes they need to make, but seven weeks later, none of the notices have been sent, the Guardian reports.

Also according to Una Farrell, spokeswoman for debt advice charity StepChange, the OFT needs to act fast.

She was quoted as saying there is no time to waste in sorting out the sector, adding: "We are seeing rising numbers of people seeking our help with payday loans, as well as coming to us with complaints about how they are being treated by payday lenders."

The regulator conducted a year-long review of the £2 billion industry and found evidence of irresponsible lending, with some companies offering short-term loans at interest rates of 4,000 per cent APR.

If they do not the rules set out by the OFT, these organisations may lose their licence with immediate effect.

A Medway Labour group has welcomed the decision by party leader Ed Miliband to clamp down on rogue payday loan lenders.

Councillor Vince Maple, head of the Medway Labour Party, said it is a positive step that the Labour Party is listening to local authorities, which are "at the grassroots" of knowing what is impacting households across the country.

"We know through speaking to people at the Citizens Advice Bureau that there are an increasing number of people reporting to them with issues of debt," he was quoted by This is Kent as saying.

The councillor has formed the cross-party task group in order to tackle problems directly related to payday loan companies in Medway, which has the highest level of debt in the south-east.

During the launch of Labour's local election campaign earlier this month, Mr Miliband announced he wants to overhaul current planning laws that allow payday lenders to set up shops in place of an estate agent or bank.

He noted that at present, there is nothing a council can do if a payday loan firm wants to move in to premises previously owned by a bank.

A government watchdog has suggested it will not use its powers to place a cap on the interest rates of payday loans as it could leave consumers worse off.

The Financial Conduct Authority (FCA) published a report on Thursday (April 11th) that claimed regulations on how many loans people can take out may hurt the bank accounts of those who require emergency funds.

Even though some payday loans have been slammed for charging customers extortionate interest rates of up to 4,000 APR, the FCA is choosing not to clamp down on this as it said people might be more strapped for cash as a result of restrictions on how often they can borrow.

"Indeed, usury laws and similar provisions have been cited as an example of regulatory failure driven by regulators' own behavioural biases," it stated.

The report also argued information disclosures have had little effect on borrowers' understanding of payday loans and have not stopped customers rolling debts over from one month to the next.

Last month, the Office of Fair Trading - the current payday loan regulator - announced a crackdown on lenders and ordered 90 per cent of companies to improve their business practices.

Ed Miliband is set to warn today (April 8th) payday lenders are abusing the trust of borrowers by opening businesses in town centres that tempt the unemployed and low-paid workers with loans at extortionate interest rates.

He will pledge a Labour government would give councils new powers to stop these firms - and betting shops - from dominating the UK's high streets by refusing permission to engulf consumers in debt.

Launching Labour's local election offensive, Mr Miliband will claim it is no wonder people are turning to payday loans companies in such hard times, but often they face interest rates of over 1,000 per cent.

He will add: "That is what politics is supposed to be about: standing up for those without power and giving power to them."

This comes after the Office of Fair Trading recently gave the nation's top 50 payday lenders 12 weeks to clean up their business practices or they could risk losing their licenses.

During a cabinet meeting on March 28th, councillor Ian McAlpine put forward his concerns and recommendations regarding the ease at which residents with financial problems can apply for high interest rate loans.

He said lenders are advancing short-term loans that need to be repaid on the borrower's next payday, with charges ranging anywhere between £15 to £30 per £100 borrowed.

"Some payday loans companies - many of whom are currently investing in high-profile advertising campaigns - can charge interest at over 4,000 per cent," Mr McAlpine explained.

The cabinet was also called upon to further promote ERC's money advice services and the local authority's partnership with East Renfrewshire Citizens Advice Bureau and East Renfrewshire Credit Union.

Mr McAlpine stated anyone who is considering borrowing money or struggling with debt must turn to the money advice services instead of payday loan firms.

Last year, ERC discovered individual debt levels of 266 of its customers varied from £64 to more than £186,000.