Isle of Wight families caught in debt trap

By a County Press reporter

Tuesday, August 12, 2014

 

SHOCKING figures have revealed more families on the Isle of Wight are struggling with debt than anywhere else in the South East.

A Children's Society and StepChange Debt investigation, published today (Tuesday) showed 5,371 families faced problem levels of debt.

The charities said debt put stress on family relationships and trapped them in a downward spiral of borrowing.

In their report, The Debt Trap: Exposing the impact of problem debt on children (available below), researchers concluded that such problems could lead to children suffering worry and anxiety, bullying and missing out on essentials.

Nationally researchers found almost 2.5 million children across the country lived in families owing a total of £4.8 billion in bills and loans.

On the Isle of Wight the total number of families affected by problem debt was 35 per cent, more than double the regional average of 17 per cent.

It said each struggling family was behind on payments by an average of £4,468 and across the region families owed a total of £807m in bills and loans.

A spokesman said: "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."

The charities have called on government to undertake efforts to address the situation by:

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

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

• Providing 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.

• Imposing tighter restrictions on advertising loans to children.

 

Matthew Reed, Children’s Society chief executive, said: "Families in the South East 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, 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."

See the report, below the table of figures:

Debt

Debt

The Children's Society/StepChange Debt 'Debt Trap' Report May 2014

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