Posted 26 November 2021
Summary A Day One right to ask for flexible working is a step in the right direction but does not go nearly far enough. We need progression of the Employment Bill with a legal obligation on...
Published on 8 February 2021
Single parents disproportionately experience problem debt: prior to the COVID-19 outbreak, 13% of single parents were in severe problem debt. This compares to 5% of couple parents and 4% of single adults. In 2019, 24% of StepChange Debt Charity advice clients were single parents, compared to 6% of UK households (StepChange Debt Charity, 2020).
The report is based on national polling of both single and couple parents conducted by Savanta ComRes, an online survey completed by single parents, as well as case study interviews.
The research found that single parents are exposed to a high number of risk factors and potential triggers for problem debt. The majority (85%) of single parents struggling with problem debt cite more than one cause that fall under the following categories:
The negative impacts of problem debt on single parents are serious and wide-reaching. For example:
Problem debt is not an inevitable part of the experience of being a single parent. Debt of this sort is driven primarily by linked issues of poverty and low financial resilience. Action in these areas will have a particularly positive impact for single parents.
The report recommends a set of priorities for government and others to better support single parents and, by extension, financially vulnerable families affected by problem debt:
In the short term, the government should prioritise protecting incomes during the downturn driven by COVID-19 by maintaining the £20 per week uplift to UC, extending it to legacy benefits and considering a targeted increase to the child element of UC and tax credits.
The government should target reducing deep and persistent poverty among single parent families by removing the Benefit Cap.
One of the key factors for single parents in enabling them to work is the availability of low-cost and reliable childcare. The government should support working parents receiving Universal Credit by increasing the caps on the childcare element of UC and introducing a mechanism through interest-free budgeting advances to meet upfront childcare costs.
Many single parents rely on child maintenance payments in order to provide for the basic needs of their children. However, children are often forced to go without essentials as a result of their parent not receiving the child maintenance payments they are entitled too. The Department for Work and Pensions should reform the CMS by:
In the long term, the government must seek to link state support for families to real living costs: we support the call for a Minimum Income Commission, similar in design to the Minimum Wage Commission, to be established with a statutory remit to advise the government on relinking the value of social security payments to living costs.
One of the key factors affecting the financial resilience of single parents is the uneven or unpredictable nature of UC payments. As UC is developed in future, the government should seek to improve the stability of payments and better support those experiencing financial difficulty through a reformed system of deductions to meet priority debts. The government should seek to link Help to Save more closely with UC and use learning from the roll-out of Help to Save to explore how the scheme can be developed to overcome savings barriers for households with low incomes that need to build and maintain access to an emergency savings fund.
As part of its financial inclusion programme, the government should work with stakeholders to develop an affordable credit strategy addressing gaps in need for financially vulnerable households, including low-cost affordable credit, a national no-interest loan scheme and grants to meet essential costs for those for whom credit is unsuitable.
Many single parents have suffered or continue to suffer economic abuse, which can push them into problem debt. Regulated firms and advice providers should use new Financial Conduct Authority vulnerability guidance to scrutinise and improve how effectively their products and services work to prevent, identify and end economic abuse – and support those who are struggling with financial difficulty and/or coerced debt as a result of an abusive relationship.
The new Domestic Abuse Commissioner should consider bringing together stakeholders to clarify the legal and regulatory changes necessary to ensure survivors of economic abuse are released from liability for unsecured debt where the liability arose from economic and/or physical abuse.
"While I was in labour, I was in the birthing pool and he was sat on his phone, gambling. I’d never felt more alone... I had two options: to use the little energy I had to be bitter and seek revenge or to focus on our future, rebuild my life and be happy again. I chose the latter."
Read single parent Lisa's story of the life-changing problem debt she was left in by a former partner - and how she reclaimed her and her son's futures.