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The Impact Of Debt On A Child’s Wellbeing


The Impact Of Debt On A Child’s Wellbeing

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Raising a family is expensive. The cost of buying and running a home, birthday gifts and parties, family holidays and everyday bills can all mount up. Meaning that plenty of families up and down the UK turn to debt in order to help them to survive.

Whilst some forms of debt can be helpful, especially for making larger purchases there are some forms of debt that can be cause problems, not only for the adults, but for the children that are part of the family.

The true extent of debt in England and Wales

Statistics taken from The Children’s Society show that there are around 2.4 million children that live within families that have debt issues. These children are 5 times more likely to be at risk of low well-being, when compared to those children whose parents are not living with problem debt.

Problem debt is when you are in arrears of at least one debt commitment.

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How debt can affect children

It is often thought that debt has the biggest impact on the adults within the household, with all the stress of balancing payments and trying to find ways to pay for all the bills that are coming in.

But, what you may not realise is that debt can also have an impact on the children within the household too.

The first way that this happens is with the stress and anxiety that is felt and often shown by their parents. Children are not stupid, and they can absorb the atmosphere and feelings of their parents.


Those who are struggling with problem debt are much more likely to become withdrawn and depressed, this is easily picked up by their children and cause harm to their children’s emotional wellbeing. This means it is vital that if you are struggling with debt issues, you should try to focus yourself on your children when you are around them, and they will be less likely to pick up on the issues that you are facing.

This is not the only way that debt can have an impact on children. One common feeling with children that are living in families with debt is that they feel embarrassed or ashamed about their lack of money. This can lead them to become withdrawn or refrain from socialising with their peers.

They may even face bullying at school. This could be because they do not have things that other kids their age do, or wear poor quality or ill fitting uniform.

One of the simplest ways that debt can affect your children is that they feel that they are having to go without essentials that they need for everyday life. This can lead to feelings of being down and even can lead to depression.

What you can do to take yourself out of debt

Worried about the debt that you have as a family, and want to make it better not only for you, but for your children too?

There are a variety of ways that you can help get yourself out of debt and improve the mental wellbeing of your family.

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IVA and Trust Deed

The IVA and Trust Deed are similar things, however, one is the English form of debt relief and one is available to those in Scotland. The idea of these is that they offer help to those that are really struggling to get a handle on their debt.

Both the Individual Voluntary Agreement and the Trust Deed are a legally binding agreement between you and those who you owe money too. They will involve set payments that you can afford to pay on a regular basis and will stop the creditors from taking any further action on you from missing payments related to your debt.

Some of the debt that you have will also be written off. Meaning that the amount that you owe is reduced.

Other ways to reduce your debt

It is a good idea to always prioritise the debt that has the highest interest rate attached to it, this often comes in the form of pay day loans or credit cards. Making the minimum payment on these forms of credit will extensively lengthen the term of the borrowing, so where possible pay higher than this amount and take off the balance as well as the interest.

Another top tip is to look at your budget. As a family there are always bills to pay and things to buy, but you may be surprised by just how much money you can save with some careful budgeting and taking a look at the things that you pay out for.

Switching energy providers can have a huge impact on how much money you pay out every month, as can where you buy your groceries from. All of these things will free up the money that you have in your bank, allowing you to allocate more to clearing off your debt.

Debt can be one of the biggest stress factors in your life, especially if it is seen as bad debt. Allowing it to have an impact on your family, especially your children, is one of the last things that you will want. So, now is the right time to take a look at how you can address and reduce the debt that you have.

If you need more information about the options available to you in dealing with your debt, you can always speak confidentially with one of our friendly advisors on 0808 2085 198.

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