Back-to-school parents turn to money lenders
Published 26/08/2014 | 10:46
MORE and more parents who are struggling to afford new back-to-school essentials are turning to illegal money lenders.
Spending watchdogs said they fear many more householders feel they have no option but to seek loans to buy uniforms and books ahead of the new school year because they can't access funds elsewhere.
The Money Advice and Budgeting Service (MABS) said up to 100,000 people who are in debt or mortgage arrears are unable to borrow funds from credit unions or banks.
Michael Culloty, spokesman for MABS, said: "The new school year is one of the most difficult times financially for people on low incomes.
"There's a growing number of people who have no access to credit and are unable to even borrow small amounts.
"It's very challenging because if you're on a tight budget and need to pay for once-off items, you need to have access to some finance, so therefore borrowings are necessary.
"But I would urge families to avoid approaching illegal money lenders. Please do not go there. Come to us instead and we'll work something out.
"We can check if families are getting all the entitlements they are due and also direct them to other services," he said.
MABS has proposed a State-backed fund to allow credit unions to provide emergency loans to struggling householders.
But Mr Culloty said he feared that in the short-term many more parents will resort to missing payments on their mortgages and utility bills in order to meet their back-to-school costs.
"We'll really start to see the extent of the problem in about two months when families are faced with demands for unpaid bills," he said.
Mr Culloty also advised hard-hit families to start budgeting now for Christmas in order to avoid starting next year laden with a mountain of debt.
"If families could put a little money away each week, it would make a huge difference."