Press releases
From Crunch to Crisis
Release Date: 26/01/2009
Poor children's health and wellbeing could hit crisis point as recession takes hold, job losses rise and the harsh weather continues.
It is expected that more and more people will be turning to lenders in desperation.
The claim comes as Barnardo’s, which is studying the effects of poverty on 16 families, releases a report From Crunch to Crisis: Winter Hardship For Families In The UK.
It reveals:
- the families have a total of 26 loans between them, worth almost £30,000. Of these, 11 loans were with the Provident, a home credit service, worth £7,109
- winter brings with it the most troubles and money lenders prosper
- high fuel bills + festivities = extortionate loans, leading to a hefty financial hangover now January has come round.
Barnardo’s chief executive Martin Narey said:
The strain on poor families right now is unthinkable.
The numbers of children in poverty is likely to get worse as the recession hits – and loan companies and loan sharks will be cashing in.
This is not a one-off for families struggling to get by. This is a constant cycle of deprivation they’re fighting against. And their loss is the lender’s gain.
But the pressure on parents, if only to keep their children warm, is harder than ever right now, with uncommonly cold weather, high fuel prices and growing numbers of parents becoming unemployed.
And the ultimate price parents pay for not being able to heat their homes are the ill-effects of living in cold and damp conditions on their children, such as asthma. This shouldn’t be happening in 21st Century Britain.
Children’s health and wellbeing could hit crisis point.
Because of the high interest rates associated with credit from companies such as Provident, many families suffer when trying to pay off these loans, and usually pay back well above the initial cost of the goods.
For example, a family borrowing £300 from the Provident and paying it back over 31 weeks would pay £15 a week. They would repay a total amount of £465, an APR of 365.1 per cent.
There are around 750,000 children living in fuel poor households in England alone.
Barnardo’s wants the Government to make sure:
- essential energy supplies are affordable for everyone
- prices for gas and electricity should be the same for everyone, regardless of payment method
- families on a low income are the first to get help to make their homes energy efficient
- families on a low income have access to free help with budgeting and managing their money, as well as free, good quality, independent financial advice on savings, credit and debt
- there are more grants and interest-free loans available for low income families to buy essential items, as well as a wide variety of low-interest loans from different providers
- there is equality of access to basic bank accounts, credit and saving facilities
View the full briefing From Crunch to Crisis: Winter Hardship For Families In The UK (PDF)
In summer 2009, Barnardo's will publish a full report of the evidence gathered during the course of 2008, reflecting on a variety of issues faced by families living in poverty and make specific policy recommendations to Government.
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