By Elliot Wright, 18th January 2010
Increasing debt levels have forced 4 million UK households with
dependent children to rely on two or more salaries to make ends
meet, new research shows.
The findings from the Scottish Widows Protection Report reveal
that giving up work to care for their children is not an option for
a massive 60% of parents in the UK.
The company warned that 62% of families relying on two incomes
do not have any form of income protection and run the risk of being
unable to survive financially if one of the bread winners becomes
unable to work as a result of critical illness, death, disability
or due to an accident.
Commenting on the findings, Scottish Widows' protection
director, Clive Allison said: "The days of one parent going out to
work while the other takes care of the family is just not an option
for many people. Nearly half of families with dependent children
now rely on two incomes to maintain a decent standard of living,
and as our stats show, this isn't likely to ease off any time
soon. For many families, sacrificing half their income when
they have children is a luxury they just can't afford."
The research also shows that debt levels have risen by over
£3000 since last year, with the average household with dependent
children owing £91,648 on their mortgage compared to £88,500 the
year before.
The average household with dependent
children owes £91,648 on their mortgage compared to £88,500 the
year before.
Those with no dependent children have significantly less
mortgage debt - £73,293, reduced by over £4000 from £77,500 since
last year.
The average dependent child household has owed £8,653 in short
term debt over the last 3 months, compared to an average of £7003
for those without children.
Mr Allison added: "The increase of debt for those with dependent
children is worrying. People are leaving themselves exposed to a
lack of income should anything happen to the main breadwinner, and
large personal debt to repay on top of this could make things even
more difficult.
"Families need to make sure they protect themselves financially
so if they do get into difficulties they have the vital back up in
place to look after their families and loved ones. If households do
not have sufficient protection, such as life cover and critical
illness cover for any of these circumstances, many could be left
struggling."
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