Families in crisis over £47m debt

Debt nightmare
Debt nightmare
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Thousands of children on the Fylde coast are living in families trapped by debt, with the amount owed an astonishing £47m according to a new study.

Research by The Children’s Society and StepChange Debt Charity shows that 10, 173 families in the resort are failing to keep up with household bills and loan repayments.

Each struggling family is behind on payments by an average of £4,652 and area trapped in a downward spiral of borrowing.

The charities’ report, The Debt Trap: Exposing the impact of problem debt on children, showed how family debt causes children to suffer from worry and anxiety, experience bullying and miss out on essentials.

And people in Blackpool today said the problem was only getting worse.

Mike Barry from Blackpool Credit Union said debt was an ever deepening problem.

He said: “We are seeing people all the time at the credit union with debts all over the place.

“The real problem since the financial crisis is that they no longer have access to ordinary credit and so have gone to pay day lenders and in many cases worse. What has made the problem worse is that pay has been stagnant over these years and benefits have been cut but bills have gone up.

“They have tightened their belts but there is no more belt tightening to be done and that has forced them into poor credit situations.

“They need to know their options. For those already drowning in debt they need to contact people like Step Change, debt charities and Citizens’ Advice.

“For those not yet drowning they could look at credit unions to build a budget they can keep to and put some money away. Then if they do need to borrow they can do it at a reasonable rate.”

Bruce Allen treasurer of the Mereside Residents Association said: “People have seen jobs go and their benefits cut and its a difficult situation.

“They simply can’t go on living like they used to and have to cut their cloth accordingly but it is not always so easy.”

Ken Cridland from Blackpool Against the Cuts said: “This report does not come as a surprise from what we have seen in Blackpool. We know of many families relying entirely on the good will of landlords to keep the roof over their heads.

“It is ironic that you have kids going round in Blackpool football shirts with Wonga on the front and their families are in debt. It is good the Government has acted to curb the activities of pay day lenders but more needs to be done.

“We are very concerned about the draconian action by the Department of Works and Pensions over benefits.”

The charities are calling on the government to develop a ‘breathing space’ scheme to give struggling families time to pay, to protect children from effects of debt collection and wider access to debt support.