Cost-of-living crisis forces care leavers into debt – barnardo’s calls on government for emergency package of support

Published on
01 November 2023

Barnardo's is calling on the Government to urgently help young people leaving care – as a report finds that many of them are struggling without the “bank of mum and dad” to help during the cost-of-living crisis. 

The report, No Bank of Mum and Dad: the impact of the cost-of-living crisis on care-experienced young people, highlights how care leavers are having to make significant cutbacks - including limiting meals, not putting the heating on, and cutting back on things such as driving lessons that would significantly improve their chances of employment.  

It paints a stark picture of how the cost-of-living crisis is disproportionately impacting care leavers because they don’t have the financial cushion of “the bank of mum and dad” when they face sudden or unexpected increases in their outgoings. Many feel they are faced with no choice but to get into debt to cover the essentials and basic living costs. 

Kylie* 20 grew up in the care system. She said: “I feel that a lot of people who are not care-experienced get a lot of help from their parents - their parents will sit down and help them. The Government need to realise that care-experienced young people struggle, we don’t have the luxury of having family to support us.” 

In a series of in-depth interviews, Barnardo’s found that young people are quickly moving from ’just about managing’ to ‘really struggling’. Many have no choice but to take out expensive pay day loans to pay off their debts. This leads to further cycles of debt and financial problems.  

Sarah*, aged 25, said: “I am literally living off loans right now, I am constantly in the loop of borrowing money and taking out loans because I am desperate. I have been through loads of loan companies, I go for the lowest pay-back but I cannot go to a mainstream bank - they can see that I cannot afford it [ ...] I don’t have any access to anyone to lend me money. I am on my own unless it’s loans.” 

The report has also found that care leavers were increasingly suffering from poor mental health due to isolation and loneliness. Many were cutting back on social activities due to concerns about money, making it harder to stay in touch with friends and family. Some also reported giving up on hobbies and other groups that were important to them because they didn’t have the money. 

Chloe*, aged 22, said: “I haven’t really been able to do anything since costs started going up. I literally have enough money to pay what I need to pay but I don’t have any money left over for anything like, you know, seeing friends. It makes me feel lonely and depressed.”  

Nicola Smith, Senior Policy Adviser at Barnardo’s said: “Care leavers are struggling with the demands of living independently at such a young age, and without the safety net of a family support network. This has always been a challenge for those leaving care, but the current cost-of-living crisis has intensified these pressures to an unbearable extent for many. 

“Young people who have grown up in care are in a more precarious position than their peers, and without the ‘bank of mum and dad’, many feel they are forced into cycles of debt and financial problems, isolation and poor mental and physical health.   

“It cannot be accepted that these young people should struggle more than their peers simply because they grew up in the care system. Without the right support, poverty will harm them long into their future, as they face worse life chances, poorer health and fewer opportunities.  

“We urge the Chancellor to ensure that care leavers have an emergency package of support in the Autumn Statement in November.” 

 Barnardo’s recommendations include: 

  • Extending the over 25 rate of Universal Credit to care leavers 

  • Uprating financial support for care leavers in line with inflation 

  • Introducing a rent guarantor and deposit scheme  

  • Providing free bus travel to all care leavers, following the lead of Cornwall and London 

  • Ending the ‘cliff-edge’ of support for children’s mental health at 18.