Report shows impact of debt on children
08 May 14
Credit unions are seen as part of the solution to the problems facing children and families in a new report from Step Change and the Children's Society.
The Debt Trap, launched this week with the support of the Archbishop of York, says that problem debt is putting stress on family relationships, damaging children and trapping families in a downward spiral of borrowing.
As well as calling for changes in how creditors treat families with children it raises concerns about how children learn about borrowing.
Children, says the report, should should be learning about borrowing from their schools and families, rather than from advertising by lenders.
The report cites examples in Glasgow and Haringey, where contributions to credit union accounts have been made for secondary school children. It recommends that the Government should establish a wider trial of this approach, linking it to financial education.
The authors also recommend that the Government should work to bring together local welfare assistance schemes, credit unions and high street banks, to improve access to affordable credit for low income families.
The Archbishop of York said: “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. We need to make sure families living in poverty have somewhere to turn other than to usury-lenders."
Matthew Reed, Chief Executive of The Children’s Society, 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.”
“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."