Family debt seriously harms children's mental health, research finds

The number of children in the UK classed as living in poverty increased by 200,000 in the last year

The children of families struggling with debt are more likely to report low mood than those from more affluent households (iStock)

Family debt can seriously harm children’s mental health, research has warned.

Children in impoverished households with debt are five times more likely to have low well-being than those in households without debt problems, a report by charity Children’s Society found.

It found that in impoverished households, the key factor in children’s well-being was the number of separate debts rather than the overall amount of debt owed. Having a number of different creditors was found to significantly increase stress in impoverished households, as different creditors may have different demands and may all call for repayment at the same time.

Distressing experiences, such as visits from bailiffs, fear of eviction and stress caused by arguing parents trying to make ends meet, were found to have a direct impact on children’s mental well-being.

23 per cent of children in households experiencing difficulty with problem debt (debt in arrears) were found to have feelings of low well-being, compared to 14 per cent in households experiencing problems with regular debt (not in arrears).

By contrast, just 5 per cent of children in households not experiencing difficulties with debt were found to have low well-being.

In fact, the report found that a higher amount of secured debt (mortgages, student loans, etc) usually indicates a more affluent household, able to take out such large loans because they know they can pay them back.

Debt for children from impoverished households sometimes means embarrassment over being unable to afford the things their peers can afford, and not being able to socialise in a regular way. Issues such as being unable to go on school trips, holidays, and even being able to celebrate birthdays, played a large role in the low well-being of the children interviewed.

One child was quoted in the report as saying: “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.”

The Children’s Society’s current ‘Debt Trap’ campaign is calling for a year-long ‘breathing space’ for families with children under 18 and young people living alone for the first time. The proposal would see such households protected from mounting debt, rising interest rates and enforcement action for a 12 month period. The idea is due to be debated in Parliament on 28 October.

Matthew Reed, Chief Executive of The Children’s Society, 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.”

Recent research by the Trades Union Congress estimates 1.5 million households in the UK are living in extreme debt, defined by having to pay 40 per cent or more of their household income to creditors. The average weekly wage is worth £40 a week less than before the 2008 financial crash. The TUC expressed concerns that “many families are having to make choices between paying the rent and feeding their kids”.

Most recent figures on child poverty released by the Government suggest the number of children in the UK classed as living in poverty has increased by 200,000 in the last year.