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Daily Record
09-07-2025
- Business
- Daily Record
Debt charity shares essential tips for parents worried about money during summer holidays
StepChange offers help and advice to people struggling with debt, so don't put off seeking support this summer. How to apply for Tax-Free Childcare and 30 hours childcare A New YouGov poll has revealed the financial pressures facing parents over the school holidays this summer. According to the research commissioned by StepChange Debt Charity, one in three (33%) parents with at least one child under 18 have no savings for a rainy day, this compares to under one in four (23%) UK adults. The study found that one in six (16%) parents with at least one child under 18 have used a credit card to pay for essential household bills in the last three months, compared to one in ten (10%) UK adults. It also indicated that one in four (23%) of parents with at least one child under 18 have used credit, loans or an overdraft to make it through to payday, almost double compared to all UK adults (12%). Almost half of StepChange's clients are parents with dependent children, and the charity knows first-hand how cost of living and debt pressures can be felt by parents more acutely. Tips to help manage your money this summer StepChange has shared its top tips for parents worried about their finances this summer, on how to avoid debt problems and have fun with family over summer with a tight budget. Plan your summer budget: It might sound simple but having a detailed budget can help to keep track of your finances and how much disposable income you have to go toward activities, food, any planned holidays and other costs. StepChange has some useful budget templates on its website. If your child is eligible for free-school meals, you should check what your local council has on offer as part of the holiday activities and food programme, which provides healthy meals, enriching activities, and free childcare places to children from low-income families. Many large supermarkets offer 'kids eat free' or for £1 deals, which is worth checking out at your local supermarket. Check out what's on offer from your local library: There are often lots of free or cheap activities on offer - including the Summer Reading Challenge, which launched on the 5th of July and encourages kids to keep reading (for free!) over the summer. Be mindful when relying on credit cards: Buy Now, Pay Later (BNPL), or other forms of credit. Before borrowing, ask: 'Do I need it? Can I afford it? Can I pay it off soon?' Avoid extra charges and build trust by staying in control. Check if your local council offers any grants for school uniforms: It may feel early to be thinking about this, but it's worth factoring it into your summer budget before August rolls around. If you are struggling with financial commitments or credit repayments, speak to your creditors who will have support in place. Don't hesitate to get in touch with a free debt advice organisation like StepChange if you're worried about debt. Simon Trevethick, Head of Communications at StepChange Debt Charity, said: 'Rainy day savings can be a lifeline for dealing with unexpected costs, but the rising cost of living has made it harder and harder to save - something which is felt particularly by parents with school age children. 'The summer holidays can bring a lot of excitement for families, but with that can be money worries of how to keep the kids entertained, cover any childcare costs and put food on the table.' He added: 'While it can be tricky, it's important to not pressure yourself into spending more than you can afford and risk triggering debt problems - it's definitely possible to have fun and make memories on a budget. If you are relying on credit to cover costs during summer while finances are tight, always be mindful of repayments in a month or two and whether those will be affordable. 'Remember, if you are struggling with debt, you're not alone - at StepChange we can offer free and impartial advice that will help you get back on track.'


The Sun
06-07-2025
- Business
- The Sun
Struggling with bills? Mortgage expert reveals whether you should take a payment break
MORTGAGE experts have weighed in on whether you should take a mortgage break if you're struggling to pay your bills. This is a type of agreement between you and your lender where you temporarily pause or reduce your payments. 1 If you are struggling with your monthly payments, it may seem like a tempting option and can help if you are facing a temporary drop in income. But it is worth thinking about the pros and cons before you make any hasty decisions. Who can apply for a mortgage holiday? Banks have different criteria that you may need to meet to be eligible for the help. For example, Nationwide rejects claims from customers who have been declined for a payment holiday in the last six months. Sometimes to qualify for a payment holiday, you'll need to have previously overpaid your mortgage. That means paying more than your agreed monthly payments until you've built up enough credit to take a break. If you are thinking of applying for a mortgage holiday, you will need to get in contact with your lender. Simon Trevethick, head of communications at StepChange Debt Charity, said: 'If you are struggling to keep up with your mortgage payments, before taking any action, it's always worth getting advice from your lender and exploring all options. "Mortgage lenders have a legal responsibility to treat borrowers who may be experiencing financial difficulty fairly and they can talk you through your options." 5 things to check before applying for a mortgage What to consider before opting for a mortgage holiday Your payments could increase long-term Pausing payments on your mortgage does not stop interest from accruing. Interest is the money you pay a lender in return for borrowing the costs to buy a home. Nicholas Mendes, mortgage technical manager at John Charcol, said: "Interest continues to accrue during the payment holiday, which means that when your payments resume, they are likely to increase." To help with this, you can choose to extend the term of your mortgage to spread the cost of the missed payments and interest. This means that you will be paying off the cost of your home for longer. It could impact future lending options One of the main concerns homeowners have is whether a mortgage agreement will affect their credit score. Creditors and lenders consider your credit scores as one factor when deciding to approve you for a new bank account or mortgage. Nicholas said taking a break from your mortgage generally does not "directly" harm your credit score. However, he said lenders "may still be able to see that you have taken one, which could influence future lending decisions". That is because the payment holiday will still show up on your credit report, which may suggest to future lenders that you have faced financial difficulty recently. But if you continue to keep up with your payments once the break ends, you should be able to cancel out any of the negative impact this has. What other options are available? A mortgage holiday is not the only option available to homeowners in difficulty. Nicholas said that depending on the situation, lenders may agree to a temporary switch to interest-only payments. This will allow you to make lower monthly payments, as you're only paying off the interest on the loan, not the principal. Nicholas added: "Another possibility is extending the term of the mortgage. "This spreads payments over a longer period and lowers monthly payments, although it does mean paying more interest over the life of the loan." For those who are not yet in arrears, remortgaging to a more affordable deal with another lender could also be an option worth considering. How to cut the cost of your debt IF you're in large amounts of debt it can be really worrying. Here are some tips from Citizens Advice on how you can take action. Check your bank balance on a regular basis - knowing your spending patterns is the first step to managing your money Work out your budget - by writing down your income and taking away your essential bills such as food and transport If you have money left over, plan in advance what else you'll spend or save. If you don't, look at ways to cut your costs Pay off more than the minimum - If you've got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker Pay your most expensive credit card sooner - If you have more than one credit card and can't pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate) Prioritise your debts - If you've got several debts and you can't afford to pay them all it's important to prioritise them Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay Get advice - If you're struggling to pay your debts month after month it's important you get advice as soon as possible, before they build up even further Groups like Citizens Advice and National Debtline can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans.


The Independent
23-03-2025
- Business
- The Independent
The higher earners in problem debt
'I feel ashamed and don't want my loved ones to find out,' is one of the main barriers to getting debt advice, according to StepChange Debt Charity. I know through my work as a money coach that there's a lot of shame around money. Money shame is the feeling that you're fundamentally 'bad', stupid, unworthy and lacking in your abilities when it comes to money. Shame makes people turn inwards, beat themselves up, and stops them seeking help. And this is a problem. Especially when it comes to debt. Because it means the situation gets worse. Monday 24 March marks the start of Debt Awareness Week, run by StepChange. It aims to raise awareness and understanding of the stigma around debt and help people take the first step to getting support. High income, problem debt If money worries leave you feeling lonely, you're not alone. In my line of work, I know that anyone can fall into problem debt – from the most vulnerable in society to higher earners. Whatever your income, if there's more going out than there is coming in, then money is always going to be a problem at some point. As one person shared with me: 'I earn £70,000 a year but I'm £30,000 in debt. I've been living beyond my means for a long time now. My perception of what's affordable has changed as I've earned more but also in relation to friends who have more money to spend than me. 'I struggle to budget. I've been winging it, hoping for the best and using credit when I get stuck. I'm embarrassed and ashamed and I've been hiding it from everyone in my life. I thought I'd be more financially secure at this point in life and it scares me that I'm not.' It's one thing to earn enough money to service debt. But it takes only one unexpected event – a financial shock – for things to unravel. Financial shock Simon Trevethick, head of communications at StepChange, says: 'We saw, five years ago, a pandemic that put in jeopardy millions of people's finances, millions of people's livelihoods. That sudden financial shock is something we've seen time and time again over the more than 30 years StepChange has been working with people in problem debt. 'The reality is that unexpected life events will impact us all at some point, whether that's a job loss, illness or a relationship breakdown. 'These things can have a knock-on effect on our finances and increase the risk of debt problems. This means that people who are on higher incomes aren't immune to getting into financial difficulty, if they're servicing multiple debts and paying out a lot to those each month. 'It's when unexpected life events happen and suddenly those debts do become an issue that it can be difficult to shed the feeling of shame and stigma that's attached to this idea that if you fall into debt, it's a result of your own financial mismanagement.' Debt stigma This debt stigma prevents many people seeking help that would aid their financial situation and alleviate their money worries. StepChange clients wait more than a year, on average, before they reach crisis point and turn to the charity for help, says Trevethick. 'Once somebody does get in touch with us and they've had an opportunity to share that burden, they start sleeping better, their relationship with their family improves, their mental health improves. 'The point of Debt Awareness Week is to highlight just how common financial difficulties are, particularly at the moment, and to say that you're not alone and there is help out there.' Seek help If you're struggling to cover your basic monthly outgoings including your mortgage or rent, household bills, and minimum credit card repayments, that's a sign to seek help. Start by pinning down where you are now. Make a list of who you owe money to, how much you owe and the interest rate you're being charged. Seek help. Financial guidance website MoneyHelper has a debt advice locator that lists where you can access free debt advice from organisations including StepChange Debt Charity. Contact your lender. Trevethick says: 'So many people are absolutely terrified to tell their lenders that they aren't able to afford their repayments. Your bank has a legal duty to help you and work out a way forward.' How did you get here? This is a big one for my clients. It's one thing to draw up a budget and work out how to tackle the debt. But it's important to address how the debt arose in the first place so we can address the underlying issue so it doesn't happen again.