Families in poverty turn to `expensive` debt

According to research by children`s charity Barnardo`s, families living in poverty have to take on `expensive and unaffordable` debt in order to survive.

Barnardo`s followed the lives of 16 families all living below the government poverty line as the recession began.

Many of the families live in areas where unemployment is particularly high, and don`t have access to low-interest credit because they are seen as too risky by high street banks.

Martin Narey, chief executive of Barnardo`s, said: "They are in hopeless situations. Typically, they have no savings, nothing to fall back on, no relatives or friends to help and in desperation they take out loans with huge interest charges, the repayment of which plunges them into deeper poverty."

A spokesperson for debt management company Gregory Pennington commented: "Taking on unaffordable debt can make a family`s situation worse, especially if the interest rates are particularly high.

"Anyone who has been turned down for a low-interest loan or is worried about their ability to afford their day-to-day living costs should contact a professional debt adviser as soon as possible to discuss their situation."

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