A zero-interest loans scheme aimed at helping thousands of people who are struggling to put food on the table is being rolled out across the UK. The initiative, the result of a link-up between the supermarket chain Iceland and a charity-owned lender, is the latest interest-free loans scheme to launch in response to growing concern about households who find themselves at the sharp end of the cost of living crisis and are unable to access or afford existing forms of credit. The scheme is designed to enable them to cover school holiday grocery bills or smooth out gaps in their income by providing interest-free “microloans” of between £25 and £100 to buy everyday items. Iceland has partnered with Fair for You on the initiative, which is being extended across the UK from 16 August after a pilot phase during which loans were provided to more than 5,000 customers. The microloans are made available on preloaded cards, with repayments set at £10 a week. During the pilot, customers paid a “minimal” amount of interest on the loans, but Iceland had decided to invest an undisclosed amount “in making all loans completely interest-free for the national rollout”. It is not clear how many people could benefit, though it is understood to be significantly more than the 5,000 who took part in the pilot. An independent evaluation of the pilot found that 92% of customers who had previously used food banks had stopped or reduced their use, while 71% said they were less likely to fall behind on rent, council tax or other bills. Anyone can apply for the scheme and, if successful, credit can be used both in-store – Iceland has nearly 1,000 outlets – and online using the preloaded card. Successful applicants receive a £100 credit limit and, on joining the programme, which is called Iceland Food Club, can load an initial top-up of £25 to £75 on to their cards. Richard Walker, managing director of Iceland Foods, said “fresh thinking” was required from business and government to find workable solutions to the cost of living crisis. The initiative has been supported by organisations including Nesta, a UK innovation foundation, and the Esmée Fairbairn Foundation, a grant-making charity. Zero-interest loans for people in financially vulnerable circumstances were trialled earlier this year by South Manchester credit union, with a wider pilot due to rolled out shortly. The government had provided Fair4All Finance, a not-for-profit organisation, with £3.8m of funding to test loans of between £100 and £2,000 that could be used to pay for much-needed items or cover costs – from upfront nursery fees to school uniforms and essential furniture.