Bailiffs, utility companies and local councils who chase struggling parents over unpaid debts may be unwittingly inflicting real damage to children’s mental health, The Children’s Society has warned.
A report by the charity, The Damage of Debt, finds that children in low-income families with multiple debts are at far higher risk of suffering from mental health problems than those in families who owe money to a single type of creditor.
For families in poverty, the crucial factor is the number of types of debts rather than the total amount owed. The more types of debt the worse a child’s mental health is likely to be.
The findings suggest that having to juggle a range of creditors, from utility companies to stores, banks and payday loan companies, all of which may be seeking to claw back debts at the same time, ramps up the pressure on financially stressed households, who may also owe money to friends, family and other members of the community.
According to The Children’s Society’s analysis, the estimated 2.4m children in England and Wales living in households in problem debt are at greater risk of having poor mental health than the children of debt-free parents. Almost a quarter (23%) of children in debt-ridden families, equivalent to more than 500,000 children, are unhappy with their lives. This means that children living in families struggling with problem debt are five times more likely to be unhappy than those in families without debt troubles.
For some children debt means not being able to socialise or take part in activities like sports or school trips, and missing out on birthdays, family gatherings and holidays. Children feel embarrassed for not owning things that are considered normal by their classmates, and guilty, anxious and a sense of failure for not being able to help their parents deal with their debts. This inability to help leaves them with lower self-confidence and self-worth.
One child told The Children’s Society: “You can’t have everything you want, but the little things we couldn’t get either because of the money situation and my mum having to pay bills and paying off her debt.”
A 15-year-old young carer said: “I feel stressed and anxious about getting the money for things.”
The Damage of Debt reveals how the impact of debt collection on children is felt directly, through the distress of repeated phone calls, letters or visits from bailiffs, and the fear of eviction, as well as indirectly, through the strain of family arguments. Both can have lasting impacts on children and their mental health.
Once a family has fallen into a debt trap, often triggered by a drop in income or unexpected big bill resulting from a lost job or broken boiler, or a significant life event such as domestic violence or a serious illness, it can be incredibly hard for them to recover and get their finances back in order. Interest accumulates rapidly and the costs of bailiff visits are often added to the money owed. Families feel they face impossible choices between keeping their children fed, warm and clothed or paying off their debts to prevent them from spiralling out of control.
The Children’s Society, as part of its Debt Trap campaign, is calling for an overhaul of the way household debts are treated to give families the chance to get things back on track – and to make sure children do not have to pay the price of debt with their mental health.
The charity is campaigning for the Government to provide a 12-month breathing space for families in problem debt, giving them time to seek advice and set up arrangements to repay their debts at a rate they can afford, free of charges, mounting interest rates and visits from intimidating bailiffs.
The Children’s Society is calling on MPs to support Kelly Tolhurst MP’s Private Member’s Bill, proposing a breathing space for families in debt, and which is due to be debated in Parliament on 28 October.
Rob Jackson, Area Director for The Children’s Society in Yorkshire and the Humber, said: “The misery that debt can cause parents is well documented but now we can also demonstrate the real damage it can do to children’s mental health.
“It’s time this country paused and gave families the breathing space they need to escape the debt trap. Families need an affordable route out that does not force them to make impossible decisions between feeding and clothing their children, and paying the bills.
“Without Government action to give struggling parents time to get their finances in order children will continue to be the innocent victims.”
