Presentation to Citizen’s Advice in Teignbridge

1. The Debt Trap Presentation to Citizen’s Advice in Teignbridge

2. The Debt Trap reports and campaigns Highlighting the damage that debt causes to children • The Debt Trap Protecting children from irresponsible for payday loan adverts • Playday not payday Exposing the impact of energy debt on children • Show some warmth Wolf at the door How council tax debt collection is harming children The cost of being care free The impact of poor financial education on young people leaving care Mental health and Debt

3. The Debt Trap • May 2014 • 2.5 million children are living in families in problem debt. • 2.9 million families are at risk of falling into the debt trap. • Often occurs when the family suffers from a sudden income shock – such as redundancy, sanctions or illness. • Debt trap is created when families borrow from one creditor to pay for another or take out credit to pay for essentials. • Parents try to hide the debt from their children who are still often aware of it

4. Playday not payday • 6 in 10 parents think that payday loan adverts make children believe they are a normal way to manage money • A quarter of children who think that payday loan adverts are fun, tempting or exciting would consider using them when they are adults • 3/4s of children had seen a payday loan advert in the past week. • 80% of payday loan adverts are before the watershed.

5. Payday loans campaign • To ban payday loan adverts before the watershed. 500 people responding to consultation “I’d like to pay credit to the Children’s Society and their supporters for bringing this issue into our inboxes and to our attention” Baroness Jolly

6. Show Some Warmth • Nearly a million children are living in families in energy debt. • The average energy debt is £431 • Parents have to cut back on heating their home to pay back debt • Children in energy debt were three times more likely to have been ill last winter than other children • Families struggling to make ends meet are facing unaffordable and irresponsible debt repayment plans.

7. Energy companies progress to date

8. Wolf at the Door • 1.6 million children live in families who have been in council tax debt • Two in ten children in council tax debt have been visited by a bailiff • Number of households falling behind on their council tax has increased by 25% due to the localisation of council tax support. • Just 14 days after missing a payment a family could get a courts summons.

9. Council changes • Councils who have changed their council tax policies • Solihull • All care leavers will have their council tax accounts marked and none of these accounts will be referred to hard recovery. This means no care leaver in Solihull will be referred to a bailiff. • Bailiffs will only visit a house where they identify children there during school hours and during term time. • If someone with a family contacts the council and asks for their debt to come back to the council from the bailiffs we will do this and make an arrangement with them. • Hammersmith and Fulham have now included in their council tax recovery policy a ‘breathing space’ scheme • Stockport now treat care leavers as a priority group for discretionary payments - overall discretionary payments budget will rise by £100,000 • Lambeth will now not send bailiffs round to homes of care leavers • Cheshire East will now provide 100% council tax exemption to care leavers up until the age of 25 • Mendip • Families with children are now viewed as a vulnerable group for council tax debt collection • Bailiffs will now only be used as a last resort for council tax collection for vulnerable groups • Debt advice will be highlighted on the council tax pages of their website, and included on written communications to residents that fall into arrears • Arrears letters that are sent out to residents will be updated to take a more supportive tone

10. The cost of being care free • 57% of young people leaving care find it difficult to manage money • Almost half of local authorities don’t provide young people leaving care with financial education and debt advice • 4,000 benefit sanctions have been applied to care leavers in the last two years • Care leavers only receive support when they reach crisis point • For care leavers subject to immigration control, their immigration status overrides their leaving care status meaning they miss out on support.

11. Mental Health and Debt • Upcoming research Examining the impact of debt on the mental health in children. • Initial analysis of the Millennium Cohort Study shows that the more creditors a parent owes money to, the more likely a child will have a mental health problem. • Qualitative research with parents and children affected – do you know anyone who might be suitable? Launching in October 2016.

12. Childrenssociety.org.uk/debt @frenchastasia Anastasia.french@childrenssociety.org.uk