Single Parents Debt Advice

There is no doubt about it, with the cost of living on the rise and £165 million pounds worth of school loans taken out for schooling fees last year, it is important that all parents keep an eye on their debt levels.

Within the next three years, a single parent with a child as young as seven could be forced into work or risk further debt management problems, as the government transfer their income support into jobseekers allowance. Currently a single parent is able to claim income support for a child up to the age of twelve years but by 2010 this age will be reduced to seven.

It is likely that more single parents will have to seek debt advice as the rise in every day expenses, such as food prices and fuel bills, means it will be very difficult to survive financially if income support stops being paid. It is estimated that the cost of raising a child from birth to the age of 21 is more than £180,000.

Chief Executive of the Child Poverty Action Group, Kate Green, comments: “Taking money away from families who are already poor, will simply increase poverty and many children will have their health and well-being put at risk.”

Single Parents Debt Advice

5 Debt Advice Tips for Single Parents

1: Check your Benefits

The benefits system is designed to help you and it is important that you are claiming for everything that you can. It is estimated that people across the UK are missing out on more than £8 billion pounds a year in tax credits and benefits, so make sure that you are not one of them. There are many ways that you can see what benefits you may be eligible for, try the online benefits calculator at http://www.entitledto.co.uk.

a) Income Support:
Income support is based on your employment status and is available to people between 16-59 years old who are on a low income and are working less than 16 hours per week, or are unemployed. For more information and to see if you can claim for income support, please get in touch with your local Jobcentre Plus Office.

b) Child Benefit:

This is a government funded benefit which is paid for each child and is not determined by your employment status or savings. You should be eligible if your child is under 16, 17 and under and has registered to work/train with the Careers Service or Connexions Service, or if they are under 19 and in full time education. For more information please contact your child benefit office.

Even if you have a job and your child is in college, they could qualify for Education Maintenance Allowance which means that they could earn an additional £30 per week.

2: Budget
It is important that you set a realistic budget for your household and stick to it. Although it might be hard to do at first, it is one of the best ways for you to control your outgoings and your debt levels. This way you should also be able to set aside extra funds for birthdays and Christmas, so that you don’t find yourself going without.

3: Switch Your Suppliers
There is no use being with a company who do not offer you value for money, and switching to a more cost efficient plan or a new supplier could save you hundreds of pounds. Although it might sound like a bit of hassle to change, it is a simple process and worth the extra effort as companies often offer the best deals to new customers.

Think about the areas where you can save money, such as broadband, telephone line, gas provider, electricity provider, digital TV etc.

4: Avoid further debt
When your finances are getting out of control, many people think that a short term solution is to take out credit cards or an unsecured loan so they can afford to pay for their current debts. But using one form of debt to pay off another can be a vicious circle of debt which is often hard to break.

Always try and avoid making payments or purchasing items with credit or borrowing additional money if you don’t need to. If you must take out further credit for an expense that you cannot avoid, then try to make sure that you pay it off the following month so you are not stung by high levels of interest. Try to avoid store cards at all costs, which have been described as the debt “devil” due to their extortionate interest rate.

5: Take Debt Advice
If you are struggling with debt then please feel free to get in touch with One Advice. No matter what your situation, we are here to help. We can speak to your creditors on your behalf and try to negotiate a lower monthly payment to your unsecured debts. You might find that paying less to your unsecured debts means that you have more money for household costs and your secured repayments, such as a mortgage or hire purchase.

Debt Advice for Single Parents

If your debt levels are becoming a struggle, then it is important that you seek expert debt advice. One Advice have a strong team of professional debt advisors, and we will help identify a debt solution which is right for your financial circumstances.

Recent research has reported that single parent families are being forced into loans with doorstep lenders, as they are struggling with debt and are often turned down by high-street banks. The One Parent Families charity reports that three-quarters of single parents are using credit to manage their finances, and 40% admitted that they are “always in debt”, compared with 28% of couples.

If you are a single parent struggling with debt levels, then maybe you do not need to take out more credit but instead make the debt that you have much more manageable to you. This is how One Advice can help, our team of expert debt advisors will go through your financial circumstances and help you to find a debt solution which is right for you.

There are a number of debt solutions which you might want to consider, including:

  • Debt Management Plan:An informal agreement between you and your unsecured creditors, where you agree to repay a reduced amount to your debt. As part of the debt management plan, you make one payment to us which we will fairly distribute between your creditors. We will also negotiate on your behalf to try and stop any additional interest and charges being added to your debt, but this cannot be guaranteed.
  • IVA: Like a debt management plan, an IVA allows you to make a lower monthly payment to your creditors but comes with added benefits. An IVA is a legally binding contract between the debtor and their creditor and is the only debt solution (besides bankruptcy) which can write off any part of your debt. All interest and charges are automatically frozen and you only repay the debt that you can afford to. You will make an agreed monthly payment over a period of 60 months and any unaffordable debt is legally cleared at the end of your IVA term.