Single parents forced into debt to cover childcare costs because of cash crisis

Single parents are more likely to live in debt and many are forced to borrow money, new research shows.

StepChange, the gingerbread and debt relief organization, said their study of nearly 1,700 single parents found that more than four in five didn’t have enough money to cover living expenses.

Single parents – more than other groups – were unable to work their way out of debt as full-time employment often led to increased childcare costs, the report said. It was also suggested that single parents were more likely to use loans for childcare the more hours they worked.

Victoria Benson, Managing Director of Gingerbread, said: “Before the pandemic, around 70 percent of single parents were employed, but this did not protect them or their children from poverty.

“It is shocking that in 2021 so many people will starve to repay debts because their incomes do not even cover the basic cost of living.

“It is vital that the government protect low-income families from further poverty by maintaining the £ 20 increase in the universal credit beyond April 2021 and by lifting the benefit cap. The government also needs to review childcare provision – it cannot be right that single parents are actually working their way into debt and not out of it.

“Without these crucial changes, single parents and their children will continue to experience poverty and the associated disadvantage.”

Half of those surveyed had defaulted on rent or mortgage payments due to debt payments, one in five had to use a grocery bank, and three in five of those in debt said they suffered from depression.

Phil Andrew, Managing Director of StepChange, said: “Even before the pandemic, oppressive incomes, rising childcare costs and inadequate benefits were routinely causing problems for single parents, even among the working population.

“Covid-19 doused this fire with fuel. An alarming number of single parents use food banks and even skip meals to feed their children. If we are to end the debt trap so many single parents face, the safety net around them needs to be strengthened. This can be done by the government in the short term by pledging to maintain the £ 20 universal loan increase and extend it for those who have legacy benefits. “

A government spokesman said: “We are helping the worst paid families, including single parents, through the pandemic by spending hundreds of billions on job security, increasing welfare by billions and adding billions to the Covid Winter Grant program. Introducing GBP to help children and families stay warm and full during the coldest months.

“In the meantime, we’ve made sure that eligible working parents can continue to receive 30 hours of free childcare and tax-free childcare even if their income levels fall below the threshold.”

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