Latest News Headlines
Commercial Credit News
|Rapid rise in single parent debt problems|
|Monday, 04 April 2016|
The number of single parents approaching StepChange Debt Charity for help has doubled over the last four years and they are now the fastest growing group among its clients, new figures reveal. The charity says that although just one in 14 UK households is headed by single parents, they now represent one in five of its clients.
Over 60,000 single parents approached the charity for debt advice last year. The charity’s figures show that single parents are more likely to be on lower incomes, in part time work and live in rented accommodation. Previous research by the charity has highlighted how low incomes and insecure work are increasingly leaving people vulnerable to debt, and such problems appear particularly acute for single parents.
In total, single parents contacting the charity had £600 million of debt in 2015, an average of over £10,000 each. All of the figures are included in the charity’s annual Statistics Yearbook, which is due to be released on Wednesday.
Single parents hugely overrepresented
Single parents are hugely over-represented among StepChange Debt Charity clients compared to the national population. They now represent 19.6% of the charity’s clients, but just 7% of UK households. The charity says this is the fourth increase in as many years, from 15.3% in 2011, and that single parents are the only type of household that is increasing as a proportion of it clients every year.
Rented accommodation and a lack of full time work
Single parents are more likely to be in rented accommodation than other StepChange Debt Charity clients (86% vs. 75% overall). They are also the most likely to be employed part time (33%) and the least likely to work full time (12%). This is much lower than national figures, where 54% work full time and 20% work part time.[i]
Single parents have tighter budgets
StepChange Debt Charity figures also show that single parents have tighter budgets than any other group. After paying their bills and expenses, the average single parent was left with an average of just £27 to put towards their debts, while the average StepChange Debt Charity client has double that amount at £55.
Single parents much more likely to have catalogue and home credit debt
Single parents are significantly more likely to be struggling with high cost credit taken out with catalogues and doorstep lenders. Compared to the average StepChange Debt Charity client, they are 33% more likely to have catalogue debt and 42% more likely to have home credit. These types of borrowing can compound someone’s financial vulnerability as they can be long term and expensive commitments, which act as an even further drain on budgets that are already very tight.
Mike O’Connor, Chief Executive of StepChange Debt Charity, said: “With the pressures of bringing in enough money and raising children alone, single parents can face a daily battle to get by. If they are unable to build up rainy day savings, it leaves them vulnerable to even small income shocks or unexpected bills and this can have severe consequences.
“We need better safety nets for when people hit problems so they don’t have to resort to credit to cope and put themselves at risk of falling into problem debt. The Government’s announcement of support for low income groups to save is a welcome move, but the job remains far from done.”
Forums International Ltd
Attendance at your first meeting is free of charge, and please quote reference 'CCR2016' to receive the special 10% discount off of your first annual subscription.
Find out more here.
The latest edition of CCR Magazine, the leading editorial publication in the UK credit industry, is out.
CCR is the premier magazine for consumer and credit professionals. It provides an independent voice to the industry, breaking major news stories and running in-depth features.
As a magazine, it works with and campaigns on behalf of the credit industry to promote its importance as a centre of potential profit and business development to the wider business world.
Providing information and analysis for thousands of senior credit professionals worldwide, every quarter.
GTS Media Ltd
81 Cambridge Road
Registered in England No: 05483197