The insolvency trade group commissioned ComRes to poll 2,005 individuals online between 21 and 23 October 2011 and the results showed that 48% of pay day loan customers believed their decision to use a pay day lender made their situation worse.
Conversely, 13 per cent of those polled said the loan had actually had a positive effect on their finances.
Frances Coulson, president of R3, said payday loans should not be used to resolve long-term debt.
She explained: "We know that many who take them out find them to be a negative experience, often escalating financial troubles.
"A new group of ‘zombie’ debtors - who currently pay only the interest charges on their debt and not the debt itself - has also been identified by R3’s research.
"One in six individuals are only able to pay the interest on their debt rather than paying off the debt itself.
"This breaks down into 11% who are only servicing debt on their credit cards, and 9% who are only paying the interest charges on their overdraft."
The highest ever levels of concern over debt were recorded in this quarter’s personal debt snapshot run by R3, with nearly two thirds (60%) of individuals worried about their debt levels.
This is up 13 percentage points on July’s figure and 21 percentage points up on this time last year.
North East tops league
In London this figure rises to 67%, but peaks at 70% in the North East where concern is at its highest.
As debt concern rises, R3’s research reveals that saving is at a low. The number of individuals with no savings at all has risen sharply from 19% last quarter to 27% this quarter.
Overall, 40% of the population is saving less at the moment than usual, compared to 27% of the population a year ago.
By Joe McGrath