Research from pensions giant Aviva has revealed that couples without children have managed to reduce their debt by an average £1000 each since the beginning of the years, whilst those with at least one child had increased their debt by £1000 each.
The study, which looked into the finances of 4000 different families found that children were the key factor in debt reduction, as those who had no intention of starting a family had reduced their average debt by £1000 to £5,736 in the last five months, whilst those who were planning to have children had only reduced it by £200, but down to £4,554 which is £1200 less than those not planning for kids.
The debt, made up of credit cards, overdrafts and loans was increased by couples with one children, by a little over £1000 to £5,452 whilst two children families saw their debt increase by a little under £1000 to £6,200.
Aviva’s Paul Goodwin explained, “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 also showed that families were now spending more of their monthly income to service those debts, up to 10% from 8% in January. Childcare costs had also increased, with one child families spending 10% of their monthly income on childcare, up from 8% and those with two children spent 9% of their monthly income on childcare, up from 9%.
The Consumer Credit Counselling Service explained that families with children were the most vulnerable in terms of debt. They added, “Clients with three or more dependent children are least able to repay debts.”