330,000 Scottish children live in households that are financially struggling

Official figures indicate that more than 300,000 children in Scotland are living in families who do not have access to emergency costs of up to £500.

The lack of financial flexibility among families has been flagged as a real concern as many Scots could be left in serious financial trouble if they are stuck with an unexpected household expense such as a broken boiler or having to replace a refrigerator.

Elaine Smith, MSP, referred to the current problem as putting Scottish families just “one big unexpected bill away from being in real financial trouble”.

Ms Smith explained:

“Replacing something like a fridge or boiler is expensive, but thousands of families with children would need to turn to debt to do it, because the cost of living, precarious work and stagnant wages aren’t letting people save for a rainy day.”

A recent YouGov survey of more than 2,000 Scots found that almost half (47 per cent) of Scottish workers run out of money before pay-day while 26 per cent have missed at least one council tax payment in the last year. Other issues were discovered during the survey, such as:

  • 30% would like to put away at least £20 per month for a ‘rainy day,’ but can’t afford to.
  • 28% can’t afford to keep their homes decorated in a decent condition.
  • 25% find it difficult or very difficult to cope with their current income.
  • 25% would like to save for a pension on a regular basis but can’t afford to.
  • 23% would like to have the recommended levels of dental treatment but can’t afford to.

The issue of poverty and financial insecurity in Scotland was also evident from debt help charity StepChange’s ‘Scotland in the Red’ report, claiming that nearly 700,000 Scots are either in, or at serious risk of falling into, problem debt.

The head of StepChange debt charity in Scotland, Sharon Bell, said she was "increasingly alarmed by the increases in the proportion of our clients who are struggling with household bills, particularly council tax".

With the average amount of council tax arrears amounting to £2,017, Ms Bell believes that “clients in Scotland are significantly more likely to have council tax arrears compared to elsewhere in the UK.”

The report found that nearly one in five were behind on their electricity bill; up four per cent on the previous year, while the amount they owed had increased by 10 per cent in just 12 months to an average of £826.

Stepchange found the most common reasons for debt were:

  • Reduced income (17 per cent)
  • Unemployment or redundancy (17 per cent)
  • Injury of illness (16 per cent)
  • Lack of budgeting (11 per cent)
  • Separation or divorce (10 per cent)

The most common age who reached out for debt advice was the 25-39-year-old age group (51 per cent). This was followed by those aged between 40 and 59 at 30 per cent, under 25s at 14 per cent, and over 60s at five per cent.

Couples with children accounted for 26 per cent of the people who contacted the charity in 2018. Despite single parents only representing six per cent of the entire UK population, the study found an increasing number of single parents are looking for debt help; rising from 18 per cent in 2014 to 23 per cent in 2018.

Douglas Hamilton, of the Poverty and Inequality Commission, believes the Scottish government needs to take meaningful action and must address the problem by “making full use of their powers to reduce housing costs, improve earnings and enhance social security.”

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Extensive links between debt and suicide revealed

New research from the Money and Mental Health Policy Institute (MMHPI) has shown extensive connections between problem and suicidal thoughts and attempts, leading the organisation to call upon the government to change the law to provide better protection for debtors’ health, among other recommendations.

Report reveals link between financial problems and mental health issues

The recent survey was based on data gathered from both the Adult Psychiatric Morbidity Survey and a survey of those with personal and professional experience of suicide issues.

The report by the MMHPI revealed that nearly a quarter of people (23%) who attempted suicide in the past year were in problem debt.

What is problem debt?

People are defined as being in 'problem debt' when they are "seriously behind on payments for bills or credit agreements or have been disconnected by a utilities provider in the past year".

The pressures of financial problems were exemplified by the case of Jerome Rogers, the 20-year-old who took his own life last year after feeling too pressurised by debts arising from parking fines.

13% of people in problem debt - around 420,000 people - consider ending their lives every year. Of the 420,000 people, 100,000 attempt suicide every year. This means that people in problem debt are three times more likely to have considered suicide than those who are in a more financially stable state.

The MMHPI says that those in persistent poverty and financial insecurity are at higher risk of becoming suicidal, and that sudden triggers - such as threatening letters from creditors or rapid accumulation of fees - might push someone to become suicidal.

Recommendations made by the MMHPI

The MMHPI has made several recommendations in order to help break the connection between problem debt and suicide. In particular, it recommends that the government should review rules relating to how creditors word their letters in order to make them more supportive and comprehensive, and less aggressive.

The MMHPI also recommends that Public Health England improves its guidance to local authorities about the importance of financial difficulty as a potential trigger for mental health problems.

Essential service providers should offer suicide prevention training to their staff, the MMHPI further recommends.

Reactions to the report

Speaking to the Guardian, Vicki Nash, the head of policy and campaigns for the mental health charity Mind, explained:

“Mind [has] found that half of people with mental health problems have thought about or attempted suicide as a result of social issues such as housing issues, debt, benefit support, and employment.”

Nash also highlighted the importance of realising that there were real people behind the statistics - including parents, colleagues, and friends.

While the government has not announced any new Bills to implement the report’s recommendations, a spokesperson did tell the Guardian that “suicide is the most devastating outcome for people struggling with the challenges of life and we are committed to helping people in problem debt receive the proper support.”

The full survey can be read here.

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