Children's mental health 'linked to family debt'

Around five per cent of children living in households that have no difficulties with debt are predicted to have low wellbeing, compared with 23 per cent of those with debt arrears, research by The Children's Society shows.

The charity, which carried out a series of interviews with young people and parents, as well as analysing data including the Millennium Cohort Study, also found that the number of debts, rather than overall amount of debt, is linked with poorer mental health in children.

The charity states in its report, The damage of debt, that debt caused a number of problems within the family, including stress, sleeplessness, and feelings of shame and embarrassment.

"Participants spoke about the stress, anxiety and unhappiness they felt about their debt situation. Of being constantly harassed by multiple creditors by telephone, email, letters and in person," the report states.

"Both parents and young people talked about feeling ashamed and embarrassed by their debt situation; they blamed themselves and felt they had failed.

"Families felt they faced impossible choices between keeping their children fed, warm and clothed or paying off their debts to prevent them from spiralling out of control."

The charity has called on the government to work with creditors and the free debt advice sector to develop a "breathing space scheme" to protect families from charges associated with debt until they can put in place an affordable repayment plan.

It also wants government to ensure that families can access financial support to prevent them falling into debt, and that those who do can access appropriate mental health support.

The charity also recommends that the government reverses the decision it made last year to freeze children's benefits and tax credits for four years, and to ensure that bailiffs are not involved in collecting debt from families with children under 18, particularly vulnerable families.