Families 'struggling with problem debt'
Nearly 2.5 million children are living in families struggling with "problem debt", according to a report.
The Children's Society and StepChange debt charity say many families are in an "extremely precarious" position and taking out loans to pay for the basics.
The stress of keeping up with repayments leads to arguments, emotional distress for children and even bullying, the charities say.
Problem debt means being in arrears on at least one bill or credit commitment
The report - The Dept Trap - is backed by the Archbishop of York, the Most Rev John Sentamu, and is based on:
- a survey of 2,000 UK households with dependent children
- an online survey of 4,442 adults
- 15 in-depth interviews with families with debt problems
- a focus group of young people in Manchester
The survey of UK households suggested "problem debt" currently affected nearly one in five (18%).
On average these households owed £3,437 - giving an estimated total of £4.8bn for all households across the UK - to service providers, lenders and government, the research found.
The findings suggested 1.4 million families across the UK, with 2.4 million dependent children, were in "problem debt", the charities said.
And a further 2.9 million households with dependent children were on the brink of sliding into financial difficulties and had been struggling to keep up with payments on household bills or credit over the past year.
"I hate [school] because my mum and dad can't afford the trousers so I have to wear trackies. But my head of my college, I always really annoy him, he goes, 'You got to get your trousers sorted out.'"
"I like to go out with my friends quite often, and to do that I need a fiver or something to get on the bus home and maybe some food while I'm out. But I've sort of like stopped going out with my friends quite recently because a fiver is bread-and-milk money."
"I hate it when my mum cries. It's the worst thing in the world."
"[On your birthday] your parents just want a special day and want you to have, want you to be happy, so they will end up... spending more and need more money... to spend on you and so end up... borrowing."
Source: Children's Society and StepChange report
The report says the impact of debt problems on children means many are suffering from anxiety, face bullying at school and having to go without essentials.
Nearly one in five (19%) children aged between 10 and 17 years in families with debt problems told the survey they had been bullied at school as a result of their family's financial difficulties.
More than half (51%) said they felt embarrassed by their lack of money.Advertising
The report calls on government to work with creditors and other groups to develop a "breathing space" scheme to give struggling families an extended period of protection from default charges and enforcement action.
There should also be a review of the protection given to families with children against debt enforcement, including the potential harm caused by evictions, bailiffs and court action, it said.
The charities are also calling on the government to review the case for tighter restrictions on loan advertising seen by children.
Children were being exposed to a "barrage" of advertising for credit products that underplayed the risks of falling into debt, the report said.
Matthew Reed, Children's Society chief executive, said: "Families 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."'Stark warning'
Mike O'Connor, chief executive of StepChange, said: "This report is a stark warning to policy makers, creditors and the wider society of the devastating effects of debt on children."
Dr Sentamu said: "When the monthly struggle to pay the bills becomes too much, often families think they have no option but to borrow money to provide the basics for their children.
"We need to make sure families living in poverty have somewhere to turn other than to usury-lenders."
Peter Fleming, from the Local Government Association, said councils had a duty to taxpayers to collect taxes so that "important services like caring for the elderly, collecting bins and fixing roads" were not affected.
"Bailiffs are only ever used as a last resort by councils and struggling families are always encouraged to get in touch with their council for financial support and advice when having trouble paying their bills," he said.
"New payments plans can be arranged before the situation reaches a stage where bailiffs are involved."