Tens of thousands of South West children hit by family debt crisis

Tens of thousands of South West children hit by family debt crisis

Tens of thousands of South West children hit by family debt crisis

First published in Somerset

TENS of thousands of children in the South West are living in families trapped by debt, research by The Children’s Society and StepChange Debt Charity has revealed.

A new study shows that almost 97,000 families in the region – 16% of the total – are failing to keep up with household bills and loan repayments.

It means an estimated 168,000 local children are living in families with problem debt.

Each struggling family is behind on payments by an average of £4,000 and across the region families owe a total of £396m in bills and loans.

An investigation by The Children’s Society and StepChange Debt Charity earlier this year found that debt puts stress on family relationships and traps families in a downward spiral of borrowing.

The charities’ report, The Debt Trap: Exposing the impact of problem debt on children, showed how family debt causes children to suffer from worry and anxiety, experience bullying and miss out on essentials.

A national survey found almost two and a half million children across the country live in families owing a total of £4.8bn in bills and loans.

Further analysis of this research reveals for the first time the extent of the impact of debt on families in the South West. It follows the launch of The Debt Trap, a campaign by The Children’s Society to lift the lid on the massive impact of debt on children’s lives.

The debt trap

While household budgets up and down the country are under strain, families with dependent children face extra pressures as they are more likely to face unexpected bills and are less able to cope with sudden financial shocks, for example redundancy, reduced hours or illness.

As families begin to struggle financially, many feel that taking on credit is the only way to make ends meet - a third of all families have had to borrow money to pay for essentials for their children in the last year. This often marks the beginning of the debt trap as credit repayments begin take up a larger proportion of income and families find themselves cutting back on essentials.

Ending the debt trap

The Children’s Society and StepChange Debt Charity are calling on the government to:

• Consider developing a ‘breathing space’ scheme to give struggling families an extended period of protection from additional charges, further interest and enforcement action

• Review whether the protection for children against the harm caused by debt collection – including evictions, bailiffs and court action – is working

• Provide earlier and wider access to debt support and advice to help families put the brakes on a downward cycle of debt and reduce the impact on children.

• Impose tighter restrictions on advertising loans to children.

Matthew Reed, Chief Executive of The Children’s Society, said: “Families in the South West are increasingly relying on debt as a way to make ends meet – but we’re in danger of ignoring the impact this is having on children now and in the future. We cannot allow children to pay the price of debt.

“With little savings to fall back on, it can take just one unexpected setback - like illness or being made redundant – to tip a family over the edge and into a debt trap that can feel impossible to escape from.

“This research exposes the shocking reality of parents lying awake at night worrying and unhappy children going without. Many families are feeling the squeeze and parents struggling on low wages are battling just to pay the bills.”

Mike O’Connor, Chief Executive of StepChange Debt Charity, said: “This research is a stark warning to policymakers, creditors and the wider society of the devastating effects of debt on children. Families face a unique set of pressures, but the sad reality is that for many parents credit which is often unsustainable has become the only way to cover their essential household bills.

“As parents become trapped in a toxic cycle of debt, children can become the unwitting victims. This is not acceptable in a society that aspires to justice and fairness. We need concerted action to ensure financially vulnerable families are given ‘breathing space’ to help them get back on their feet and protect both children and families from the most harmful effects of debt.”

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