Single working parents unable to escape debt

Single parents are unable to work their way out of debt despite working full time, a new report by charities Gingerbread and StepChange has discovered.

The Single Parent Debt Trap found working single parents are more likely than any other sector of society to be living with problem debt.

Eighty-two per cent of single parents reported not having enough income to meet living costs, which meant they were forced to borrow money and ended up in debt.

Victoria Benson, chief executive of single parent charity Gingerbread, said that 70% of single parent incomes do not cover basic living costs.

She said: “Even though they are in work it does not protect them or their children from poverty. It’s shocking that in 2021 so many are forced to go hungry in order to repay debts built up.”

The report also found that single parents who worked full-time hours were more likely to be in problem debt as they had increased childcare costs to cover.

Phil Andrew, CEO of StepChange, said it is important to understand why the majority of single parents have found themselves in need of more support.

He said: “The findings of this report make for sobering reading, revealing that even before the pandemic, squeezed incomes, rising childcare costs and a lack of benefit protection were routinely sweeping single parents into hardship, even among those in work.

“COVID-19 has poured fuel on this fire, with alarming numbers of single parents using food banks and even skipping meals in order to feed their children.”

Further reading

How HR can support working parents

Can we escape the single parent trap?

Childcare labelled leading cause of stress while working from home

Single parents were found to be more likely to use credit to pay for childcare as the hours they worked increased.

Twenty-five per cent of those working full time (35 hours or more) paid for childcare by using credit, compared with 17% of those working part time (16-24 hours).

Andrew said in order to end the debt trap single parents are faced with, the safety net around them must be strengthened.

“This is something the government can do in the short term by committing to maintain the £20 uplift in Universal Credit, as well as by extending it to those on legacy benefits,” he said.

The report has called on the government to maintain the £20 per week uplift to Universal Credit payments and to develop a Minimum Income Commission, as recommended by the Institute for Public Policy Research, similar to the Minimum Wage Commission, with a statutory remit of linking state support to actual living costs.

Joe Richardson, report co-author, said employers also need to make sure they provide secure, flexible well-paid work for single parents.

Speaking to HR magazine he said: “It cannot be right that more hours results in more debt because of basic childcare costs. Similarly, single parents shouldn’t have to forgo their career progression due to worries over debt.

“HR should reach out to single parent employees to make sure they can work flexibly as possible, explore remote working options and guarantee they have access to well-paid and secure work.”