Warning over child poverty rise

The debt problems of families with children may get worse, if claims by the Child Poverty Action group (CPAG) prove to be well-founded.

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The debt problems of families with children may get worse, if claims by the Child Poverty Action group (CPAG) prove to be well-founded.

A report by CPAG entitled: Ending child poverty by 2020: Progress made and lessons learned'  has warned that the reduction in child poverty that occurred over the period between 1998 and 2010 is in danger of being lost because of changes to the tax and benefits system being implemented by the coalition government.

Chief executive of CPAG Alison Garnham said: "Under current policies they risk wiping out all these hard-won gains. Unless their strategy improves, their legacy threatens to be the worst child poverty record of any government for a generation."

The report suggested that the previous government's changes to the tax and benefits system mean 1.8 million fewer children are in poverty today than would otherwise be the case.

If the CPAG claims are correct, it could mean many families who have debts are less able to pay them due to their decreased net income.

For those who find meeting regular non-debt payments like energy bills and food shopping costs increasingly difficult as incomes fall and the costs of these rise, the temptation to take on debt to pay for it may grow.

Those who fall into this trap may benefit from a debt management plan, as this can help spread out repayments over a longer period of time as part of a concerted and detailed strategy to get back on an even keel financially.

A recent report by the Ernst & Young ITEM Club recently stated UK consumers have been facing the greatest squeeze on incomes in a generation amid depressed wages and high inflation.

However, senior economic adviser Andrew Goodwin suggested the worst of the situation is likely to have now passed, with consumer price index inflation set to fallback to its two per cent target by the end of this year.

Posted by Paul Thacker

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