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Children and family debt: never-never land Children and family debt: never-never land
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"You owe me five farthings, say the bells of St Martin's." Like many nursery rhymes, Oranges and Lemons allows a dark reality to cast its shadow over the innocence of the playground. According to a new report by The Children's Society, almost 1.4 million families in the UK with dependent children are currently living with problem debt. It calculates that 2.5 million children are living in families that are behind in their household bills and loan repayments to the tune of £4.8bn. "When will you pay me? Say the bells of Old Bailey. When I grow rich. Say the bells of Shoreditch. When will that be? Say the bells of Stepney. I do not know, says the great bell of Bow." "You owe me five farthings, say the bells of St Martin's." Like many nursery rhymes, Oranges and Lemons allows a dark reality to cast its shadow over the innocence of the playground. According to a new report by The Children's Society and StepChange Debt Charity, almost 1.4 million families in the UK with dependent children are currently living with problem debt. It calculates that 2.5 million children are living in families that are behind in their household bills and loan repayments to the tune of £4.8bn. "When will you pay me? Say the bells of Old Bailey. When I grow rich. Say the bells of Shoreditch. When will that be? Say the bells of Stepney. I do not know, says the great bell of Bow."
In 2014, however, children are just as likely to be singing TV jingles for payday loans. The Children's Society research shows that more than half of kids see ads for loans "often, or all of the time". Indeed, they are five times more likely to see these ads than to learn about money at school. Even in the playground, our nation's children are immersed in a sea of marketing for quick, easy and incredibly expensive credit. In 2014, however, children are just as likely to be singing TV jingles for payday loans. The research shows that more than half of kids see ads for loans "often, or all of the time". Indeed, they are five times more likely to see these ads than to learn about money at school. Even in the playground, our nation's children are immersed in a sea of marketing for quick, easy and incredibly expensive credit.
Apparently, the economy is improving. But for whom? For an increasing number of children it is borrowed cash that keeps them in winter coats and hot dinners. Whether it's payday loans, costly hire purchase agreements or catalogues and credit cards, parents are increasingly turning to lenders to afford the basics. Many will feel ashamed and judged. High cost credit is rarely, if ever, a sound financial choice. But thousands of families now can't afford to maintain their children – or, facing an unexpected setback, like illness, or a broken boiler, feel they have nowhere else to turn. With interest rates as high as 4,000%, it's hardly surprising that what begins as a short-term fix can turn into an inescapable trap.Apparently, the economy is improving. But for whom? For an increasing number of children it is borrowed cash that keeps them in winter coats and hot dinners. Whether it's payday loans, costly hire purchase agreements or catalogues and credit cards, parents are increasingly turning to lenders to afford the basics. Many will feel ashamed and judged. High cost credit is rarely, if ever, a sound financial choice. But thousands of families now can't afford to maintain their children – or, facing an unexpected setback, like illness, or a broken boiler, feel they have nowhere else to turn. With interest rates as high as 4,000%, it's hardly surprising that what begins as a short-term fix can turn into an inescapable trap.
There isn't always sympathy for debtor parents. Credit is often thought of as a matter of consumer choice and personal responsibility. But the research shows that when people do feel defeated and ask for help, they are frequently given none. Families surveyed said they were often treated "very badly" by lenders, frequently were provided with "no help at all" and in some cases were just offered more and more credit. The poverty of children and their families has rarely been as profitable.There isn't always sympathy for debtor parents. Credit is often thought of as a matter of consumer choice and personal responsibility. But the research shows that when people do feel defeated and ask for help, they are frequently given none. Families surveyed said they were often treated "very badly" by lenders, frequently were provided with "no help at all" and in some cases were just offered more and more credit. The poverty of children and their families has rarely been as profitable.
Once in the debt trap, things get ugly for families. The Children's Society's report tells of indebted children being bullied at school, families arguing and breaking up. Debt doesn't just arise from, and produce further, poverty – it also creates its own acute psychological pressure. So when a children's charity tells us 10-year-olds are lying awake worrying about debt at night, and living in fear of the bailiff at the door, we should be deeply concerned. We're in danger of condemning a generation of low-income children to damaged lives. Once in the debt trap, things get ugly for families. The Children's Society's and StepChange report tells of indebted children being bullied at school, families arguing and breaking up. Debt doesn't just arise from, and produce further, poverty – it also creates its own acute psychological pressure. So when a children's charity tells us 10-year-olds are lying awake worrying about debt at night, and living in fear of the bailiff at the door, we should be deeply concerned. We're in danger of condemning a generation of low-income children to damaged lives.
• This article was amended on 13 May 2014 to clarify the provenance of the new report on the impact of problem debt on children, which was jointly researched and authored by the Children's Society and StepChange Debt Charity.