Friday, 25 April 2008

'Families at breaking point' as Debts Rise

DEBT is forcing families to miss meals, go onto medication and is causing marriages to end, a national charity has found. Christians Against Poverty (CAP), the specialist debt counselling charity, said the strain put on families by personal debt is pushing many to crisis point.

In research among its clients, published yesterday, CAP found that almost a quarter (23 per cent) said that debt caused their relationship to break down. In a worrying development, 67 per cent also confessed that they had missed meals to make debt repayments and nearly a quarter (22 per cent) did so regularly. This is evidence, the charity stated, that increasing numbers of families are sacrificing food for the sake of paying bills.

The psychological toll on families and individuals was also highlighted, as over half (53 per cent) of all respondents said the financial strain of being in debt caused arguments and stress with their partner. Sixty-nine per cent had visited the GP due to debt-related stress. Furthermore, 40 per cent have also been prescribed medication by their doctor as a result of debt-related stress, as the negative consequences of a life spent struggling to make repayments continue to become more apparent.

Matt Barlow, UK CEO, CAP, said, 'Our latest findings are truly shocking, highlighting the trauma that many families in debt face on a day-to-day basis. Our results provide strong evidence that families and couples across the UK are being pushed to breaking point and beyond, with many not eating properly, taking medication and splitting up as they can no longer cope.'

The findings come against the backdrop of the global credit crisis, and a testing financial environment, with households facing increases in food, fuel and utility bills. This week housing charity Shelter warned that almost 60,000 families will have their homes repossessed in 2008 as people struggle to pay mortgages and loans secured against their houses.

On Monday the Bank of England agreed to bolster the struggling mortgage market by lending banks £50 billion of government bonds. The following day chancellor Alistair Darling met the mortgage lenders to press them to cut the cost of home loans and look at ways of helping people refinance their mortgages. The Government has also faced criticism for its scrapping of the 10p income tax rate, while a report from the price comparison website identified almost three million people who have plunged into debt by 'living a middle class fantasy' without the means to pay for it.

Personal debt in the UK now sits at a record high of £1.4 trillion. Niall Cooper, national coordinator for Church Action on Poverty, told The Baptist Times the causes of the current debt crisis need to be addressed. He cited the 'irresponsible' lending practices of many banks and building societies and the extortionate interest rates charged by loan companies who target poorer communities. 'These findings confirm the devastating impact that unsustainable levels of debt have on individuals and families - especially those who are already struggling to make ends meet,' he said. 'The recent increases on food and fuel - allied to the ending of the 10p tax rate - will only make matters worse.'

He added, 'While debt counselling is desperately needed for those who get into debt problems, Church Action on Poverty believes that much more also needs to be done to tackle the root causes of the current debt crisis. 'This research should be a wake up call to the churches to speak out against those in society who profit by preying on the poor and vulnerable.'

Christians Against Poverty, which operates through a national network of 72 debt counselling centres, believes there is some cause for hope. The charity has launched a free money management course, CAP Money, across the UK to enable people to get a better grip on their finances. Mr Barlow said, 'While these statistics paint a very negative picture and it would be tempting to think that there is no solution, we believe that our unique and holistic approach to debt counselling provides people with hope and a genuine and proven opportunity to become debt free.'

In addition, more than 500 churches from around the country and across denominations have signed up to a campaign to be more proactive in dealing with debt in their congregations and the wider community.

Red2Black, courtesy of Christian financial support services charity Stewardship, urges churches to set up money ministries, train volunteers as personal budget coaches and use Sunday, June 29 as a focal point for using the teaching materials. Aided by the free resources available on the campaign website,, the site has already attracted over 6500 visitors since its launch in January. Steve Pierce, head of Stewardship Money (the education division of Stewardship behind Red2Black), said, 'The church is not the first place people with money worries would usually think of turning, yet Jesus had more to say about money and possessions than almost any other subject. 'Red2Black is about reconnecting the church to these issues, and equipping them to respond practically.'

Source: Baptist Times (24/4)

I have been meaning to write about the growing problem of families struggling as a result of debt problems for some time, so this article from the Baptist Times is a welcome alarm call to the churches to take action and give these families as much support as they can.


Sally said...

excellent post here Olive, many of the young families I minister to both in church members and others struggle with this issue... to be honest I have myself...false expectations and relentless marketing are constant voices, along with the fact that banks seem to prey upon the vulnerable....

Care for The Family has some excellent resources.

Olive Morgan said...

Thanks, Sally! Care for the Family is a very good suggestion and a great help for anyone in the church unsure how to help. It is very hard for young families struggling to set up home, and the 'buy now, pay later' marketing starts them off too easily on the slippery slope into unmanageable debt - not even mentioning students who begin their working life with a huge debt as the price of their degree,

I feel that the whole attitude towards money in today's society needs revision, with so many TV programmes, even for children, having an emphasis on getting rich quick.