Students are increasingly relying on payday lenders as a way of plugging holes in their finances, the chief financial ombudsman has told MPs.

Caroline Wayman, chief executive and chief ombudsman at the Financial Ombudsman Service (FOS), told the Treasury Committee that payday lending has become "pretty prevalent in the student community".

She said: "One of the things about payday lending that we've learnt over time is that, actually, all sorts of people are taking payday loans now.

"One of the things that's come to our attention more recently is that actually it's pretty prevalent in the student community so a lot of the student unions are quite worried actually about the number of people who are now relying on payday loans to supplement their income."

The payday industry is undergoing a huge clampdown after coming under the oversight of City regulator the Financial Conduct Authority (FCA) in April.

Asked why people use payday loans, Ms Wayman said: "We have been struck by the breadth of different backgrounds of people taking payday loans. Students was one particular group which perhaps people would naturally associate with payday lending, but there is a growing prevalence among students."

Ms Wayman said the ombudsman service is talking to organisations about how it can promote some of its messages through student unions, so that people realise they can contact the service for help and "they're not going to tell my parents".