Children taking the strain as millions of families rely on debt

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MILLIONS OF families are relying on debt to make ends meet - with many more on the brink of sliding into financial difficulties.

A report out today by the Children’s Society and debt charity StepChange, said 1.4m families, with 2.4m children are struggling with “problem” debt.

And almost 3m more are on the brink of sliding into financial difficulties and struggling to keep up with payments on household bills or credit over the past year, they found.

Many families are in an “extremely precarious” financial position, leading them to take out loans to pay for necessities, the charities said.

And the stress of keeping up with repayments leads to rows, emotional distress to children and cut backs on essentials.

The charities are now calling on the Government to work with creditors and other groups to develop a “breathing space” scheme to give struggling families an extended period of protection from default charges and enforcement action.

There should also be a review of the protection given to families with children against debt enforcement including the potential harm caused by evictions, bailiffs and court action, the report said.

The Archbishop of York, Dr John Sentamu, joined the call for action.

“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,” he said. “We need to make sure families living in poverty have somewhere to turn other than to usury-lenders.”

The survey found “problem” debt - arrears on at least one household bill or credit commitment - affects close to one in five households with children in the UK. On average these owe £3,437, or an estimated £4.8b to creditors and government.

Nearly one in five children aged 10 to 17 years old in families with debt problems told the survey they had been bullied at school as a result of their family’s financial difficulties, while more than half said they felt embarrassed by their lack of money.

Matthew Reed, Children’s Society chief executive, said: “Families 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.”

Marilyn Banister, money advice supervisor at Leeds Citizens Advice Bureau, said those seeking advice often don’t know the right thing to say to lenders to access help.

“People often feel quite helpless. They feel that creditors don’t listen when they say ‘I can’t pay.’ They think they are saying ‘I won’t pay,’ which is a huge difference. The people coming to us for advice are normal, working families who are finding balancing the household budget more difficult.”

Leeds Credit Union is seeing up to 400 new members a month. Joanne Rogers, business development manager, said some were paying off payday lenders.

She said: “It’s the accessibility - they borrow and then borrow again to meet payments. It spirals out of control and before you know it a £300 debt has turned into £1,500.”

Access to payday lender websites was blocked from computers in libraries and council contact centres across a swathe of Yorkshire last year.

Six West Yorkshire councils, including Wakefield and Kirklees, Barnsley and York councils all took the action in an attempt to stop people seeking loans from the high-interest sites.