Families are struggling to cope with rising costs and are seeing their credit card debt rise whilst childless couples reduce their borrowing. That’s the conclusion of a recent report from Aviva which has found that people with children are increasingly struggling to make ends meet.
The Aviva study asked 4,000 families about their finances since the start of 2011. Whilst childless couples who had no intention of starting a family had managed to reduce their debt by £1,000 since the start of the year, couples with one child saw their debts rise by an average of just over £1,000 to £5,452.
Paul Goodwin of Aviva said: “Families with children have different financial commitments from those without, and as such are likely to face different pressures on their monthly income. Those with children may have extra priorities such as childcare and extra-curricular activities and may well feel the pinch of meeting these costs.”
The research from Aviva also found that families are spending 10 per cent of their monthly income on servicing their debts – 2 per cent more than in January 2011.
And, recent inflation figures have shown that the situation is getting worse for many families. Inflation was up to 4.5 per cent in April as the costs of alcohol, travel and home energy all increased. And, figures from financial analyst Moneyfacts have shown that average personal loan and credit card rates are at their highest levels for several years.
The financial information service found that the average credit card rate in the UK is now 19.1 per cent, compared to 18.7 per cent in November 2010. Personal loan rates have also risen to 12.8 per cent; their highest rate since 2000.