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Single mums dealing with debt

Posted 07 March 2016 by Christine Walsh

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If you’re a single mum you may find it harder to manage your debt repayments. Read our blog to learn more and how to you can find your way out of problem debt.

If you read our blog on Monday, you will have seen that, for the first time, there are more women becoming insolvent than men. To explore why this might be, we’ve been looking at the changing roles and attitudes of women and how this may impact on how they borrow, budget and feel about money.

Today we’re going to be carrying on with our women and debt week by exploring the issue of single mums and problem debt.

What the research says

Our research shows that although more women are becoming insolvent than men overall, there are certain groups of women that are at more risk of finding themselves in problem debt than others. It seems that becoming a mum is one of the main reasons why women can find themselves in problem debt, as well as illness, a fluctuating income and failure to budget. Added to that, lone mothers are significantly more likely to find themselves unable to make payments than mothers with a partner, with 53% of single mothers struggling, compared to 29% of mothers in a relationship.

We also learned that married women with children are more likely to save than single women with children, presumably because they are more likely to find themselves in a position where they can.

Why might single mothers find themselves in problem debt?

Having looked at the research, and from our own experience helping people with debt, we’ve narrowed down the reasons that people find themselves in problem debt to three main areas – unexpected life events, over-spending and relying on credit to make ends meet. It’s probably safe to say that, for some women, becoming a single mother was in itself an unexpected life event. You may have planned to raise children with a partner and made predictions on what you can afford based on two peoples’ income. When one income suddenly stops coming into the household, it can cause serious financial upheaval that some women may find hard to recover from.

So having an unexpected life event, like breaking up with a partner, can sometimes lead to having to rely on credit to make ends meet. If being a single parent has meant that you’ve had to cut down on the hours you work, so that you can successfully juggle it with childcare, you may find you’re having to cope not only without your partner’s income, but with a reduced income yourself. The situation is made even worse if there are joint debts with your ex-partner which you have now been left to pay alone – an experience 6% of the women surveyed could relate to.

The stats show that the biggest areas that women are falling behind on are rent/mortgage payments, credit cards, council tax and utility bills. We can see from this list that some women are not able to make their priority payments, which is a worry. This further supports the idea that for some women, borrowing has become something they need to do to pay for life’s essential, rather than something they choose to do for luxury, non-essential items. For some women up and down the country it could literally be a choice between paying the council tax or keeping the house warm enough for the children through the Winter.

If this is you, it’s really important that you understand the difference between priority and non-priority bills. If you can make all your payments and get by, then our advice would always be to do so. However, if it does come down a hard choice, there are some debts you should put before others. Make sure you read our blog so you make the right decision.

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Women’s priorities

When we asked women what would make them happiest in terms of their finances, we saw there was a difference between married women with children and single mothers. For married women, being able to completely pay off their mortgage was consistently the number one goal, but for single mothers, they put being able to afford their regular household bills first. This certainly suggests that single mothers are the group which face the greatest difficulty in managing their everyday living costs.

Help for single mothers

Whilst the stats around lone mums struggling with debt may seem gloomy, particularly if you are one, there is always a way out of problem debt no matter what your circumstances.

Single parents may find that they are entitled to claim some sort of benefit to help them, even if they are working. Make sure you’re not missing out on Government help that could make all the difference.

It may also be possible to apply to your local council for a Support Grant, (just search this term along with your council’s name in Google and you should find what you’re looking for), which are designed to help in the most serious of cases and may not need to be repaid at all. It’s always worth checking whether you are eligible for one of these before you attempt to borrow, as it will be much better for you in the long run.

Or you could qualify for a charity grant, if you’re trying to raise money for a specific purchase, like equipment to help deal with a disability or to support your child’s education. Turn2Us is a great resource that will tell you whether there are any grants available to you.

If you’ve got to the point where you know you can’t afford your debt repayments and essential bills, even with changes in your spending habits, it may be time to seek professional advice and consider a debt solution. There are debt solutions that enable you to reduce the amount you contribute to your debts every month, like Debt Management Plans (DMPs) and Individual Voluntary Arrangement (IVAs). Or, there are debt solutions like bankruptcy and Debt Relief Orders (DROs) which allow you to suspend your payments altogether in some cases, and assume that you would never be able to pay your debts back in a reasonable amount of time. If you’re struggling with debt and living in Scotland, there are a range of different solutions available, click here to learn more about them.

Each debt solution is different and comes with its own set of pros and cons, but if you feel like you’re not coping with all your financial commitments, it’s definitely worth picking up the phone, speaking to one of our advisors and finding out whether there’s a solution out there for you. Whether you’re a single mum or not, you don’t have to resign yourself to a life constantly struggling to make ends meet. Make sure you reach out and get the help you need.

 

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.