CHILDREN in debt-burdened families are suffering extra trauma as
the financial stress puts pressure on domestic relationships, a new
The Debt Trap, a report by the Children's Society and
the debt charity StepChange, and backedby the Archbishop of York,
Dr Sentamu, looked at the situation of the 2.5 million children in
families with problem debt, and a further five million in families
that were struggling to keep up repayments.
It found that those in families with problem debt were more than
twice as likely to be unhappy at school, and be bullied because
they did not have the same things as their friends.
Half of those questioned said that problem debt caused arguments
in the family, and more than half (58 per cent) worried about their
family's financial position. Nine out of ten families in problem
debt could only keep up repayments if they cut back on essentials
such as food, clothing, or heating.
The report also found that more than half of children aged ten
to 17 saw advertising for loans either "often" or "all of the
time"; but only one in five learned about money-management at
The chief executive of StepChange, Mike O'Connor, said: "This
report is a stark warning to policymakers, creditors, and the wider
society of the devastating effects of debt on children. The sad
reality is that, for many parents, credit which is often
unsustainable has become the only way to cover their essential
"As parents become trapped in a toxic cycle of debt, children
can become the unwitting victims."
The report's findings are based on a survey of 2000 families
with dependent children; another survey of 4442 adults; 15 in-depth
interviews of parents with children facing problem debt; and a
focus group of young people.
The charities have called for changes in how creditors treat
families with children who fall behind on bills. They say that the
Government should review protection for children in the light of
the harm caused by debt collection, and consider a "breathing
space" scheme, providing an extended period of protection from
additional charges, interest, and enforcement action.
Local authorities should have a debt-collection strategy that
acknowledges the impact on families with children, and regulators
should make sure that creditors have "early warning systems" to
alert them to problems and offer advice and support.
"When the monthly struggle to pay the bills becomes too much,
often families think they have no option but to borrow money to
provide the basics for their children," Dr Sentamu said. "We need
to make sure families living in poverty have somewhere to turn
other than to usury lenders."
The chief executive of the Children's Society, Matthew Reed,
said: "We cannot allow children to pay the price of debt. This
research exposes the shocking reality of parents' lying awake at
night worrying, and unhappy children going without."