Parents The whole of the UK is facing “worrying” levels of debt – and financial experts believe it is only getting worse amid the cost of living crisis.
Research by CreditFix It was found that of the 143,000 people who were helped by a personal insolvency provider between January 2016 and July 2022, the average debt level for under-18s was £17,402.
In comparison, the national average debt level is £15,998.
Layla Johnson, regional manager at CreditFix, said almost half (47%) of her customers are parents – and data shows the added costs of parenthood are driving up debt levels.
“The rising cost of living means that we are expecting to see this additional strain on households continue,” she warned.
“The figures across the UK paint a worrying picture – we know mortgage and rent costs are rising for many people alongside other essentials like energy and food bills.
“In this environment, parents are confused and desperate – and forced to make tough decisions about what to cut in order to stretch the budget as far as possible.”
HuffPost UK previously reported that, as the cost of living approaches, some parents are turning to candles at night to save electricity.
New report suggests the “crippling” cost of childcare plays a big role in parents’ debt. Average cost of placing a child in nursery Part-time is over £7,000 – This rises to just over £14,000 for a child under the age of two to be placed in full-time care.
“Unfortunately, childcare costs have continued to rise in recent years, especially for those in full-time employment,” Johnson said. “Many parents are not in a position to pay these rising fees and it can put a real strain on family life.”
Jennifer, who preferred not to share her surname, said she is “dreaded” going back to work from maternity leave as she has £2,000 a month childcare costs to fund.
When her first child was eight months old, she became a single parent and faced the brunt of childcare expenses.
The 37-year-old from Dorset said: “I was not prepared for how expensive child care would be. I had to rely on credit cards and loans and found myself losing around £8,000 before eventually deciding to seek help. found in debt of through an IVA (Individual Voluntary Arrangement).
Jennifer has since remarried and – with her husband – has a blended family of six children, from her youngest who is seven months old to her oldest who is 17.
“I will be going back to work soon after being on maternity leave, but the increase in nursery fees will increase our childcare bill to around £2,000 a month, on top of other rising costs such as the energy bill,” she said.
“We need to earn more than minimum wage to keep our heads above water – but we will also need to spend more money to qualify.
“We are encouraged to ‘better ourselves’, but this is not possible in our current situation. A job counselor also suggested that we should assess how affordable it would be for me to go back to work. “
Childcare aside, there are lots of extra costs involved in raising children – from the expense of buying all the kit for a new baby, to the cost of feeding and clothing them for years.
“As a new parent, you have a lot of extra costs. Essentials like nappies and baby wipes are expensive, and you can spend a lot of money on baby chairs and cribs, which they quickly outgrow. are,” said mum Danielle, 32, from Essex.
“Although it’s easier to pick them up second-hand, there’s still a cost.”
Daniel’s debt increased when his daughter, now two years old, was born. “I already had a three-year-old son, and I felt he needed the best of everything – including the latest fashions and gadgets,” she said.
“What I know now is that all they need is a warm home and love.”
Danielle’s story is sadly far from unique. research Commissioned by Ergobaby UK found that more than half (56%) of new parents went into debt because of unexpected or unplanned costs associated with their first child.
“I bought a lot of things from the catalog that my daughter didn’t really need, and eventually got to the point where I owed £9,500.”
– Danielle, 32
Of those surveyed, 23% of parents borrowed money from family to meet their child’s costs, while 28% relied on credit cards to make purchases.
Daniel said, “I bought a lot of things from the catalog that my daughter didn’t really need, and eventually got to the point where I owed £9,500.”
“I know from my own experience that it is really hard to ask for help. You feel embarrassed that you have managed to get yourself into so much debt but there is so much support out there.
If you’re worried about mounting debt, you can get free advice citizen adviceCharity step change, money advice service And national credit lineThey can help you prioritize your payments based on your individual circumstances, and work out ways you can be better able to pay off your loans.
If you live in England or Wales, you can also get temporary protection from your creditors while you get debt advice and make planning Through the ‘Breathing Space’ scheme.
Danielle is now paying down her debts in manageable amounts through an IVA – where she has agreed to make regular payments to an insolvency professional who then distributes this money between her creditors.
“Life is really hard for families right now, and I’m worried about the cost of gas and electricity and whether I’ll be able to keep my kids warm this winter,” she said. “But at least I’ve got my spending and debt under control.”
(tags to translate) money