Breathing Space - the Debt Trap

An assembly by The Children’s Society

by The Children’s Society

Suitable for Key Stage 4/5

Aims

To consider the negative impact of debt and the importance of managing money well.

Preparation and materials

• You will need the PowerPoint slides that accompany this assembly (Breathing Space) and the means to display them. (The contents of the assembly are also included in the notes of the slide deck.)

• You will need the script for ‘Jacob’s Journey’. This can be read by the assembly leader or a student.

Assembly

1. Have Slide 1 on display as the students enter the room.
   
   Show Slide 2.
   
   Ask the students, ‘What is debt?’
   
   Explain that debt is when someone owes money.

2. Show Slide 3.

   Explain that it can be easy to fall into debt just by spending a little on the credit card here and there, borrowing a bit of money to buy something you need or want or accidentally overspending on your monthly allowance so that you haven’t got enough left to pay an important bill.
   
   However, it can be difficult to get back out of debt. When we use credit cards, it is easy not to think of using them as spending real money. You can simply pop in your card details and forget about the money that has just been spent. In reality, though, not only is it real money, but it is money that will have interest added to it!

3. Ask the students, ‘Who knows what an interest rate is?’
   
   Explain that interest rates refer to the money a person is charged when he or she borrows money. Interest rates build up over time. Let’s say you borrow £100 from the bank. When you pay it back the following year, you might have to pay the bank £110. Some loan companies have particularly high interest rates, so you could end up paying back considerably more in interest to these companies.

4. Show Slide 4.
   
   Let’s hear the first part of a story about a boy named Jacob.

   Read, or ask a student to read, the first part of ‘Jacob’s Journey’.
   
   Jacob lives with his parents and sister. Both of his parents are in low-paid jobs. They receive some benefits, but money is still quite tight and over time, they have taken on various debts.
   
   Jacob’s family were making minimum payments on their debts, so they were managing until Jacob’s mum had to go on maternity leave. Maternity pay and his dad’s income together were not enough to keep up with payments, and their debts began to spiral out of control.
   

5. Now let’s stop and reflect on what we’ve just heard. What happened to push Jacob’s family into debt? (Answer: his mum going on maternity leave. Maternity leave is when a pregnant woman stops work for a while to give birth and then look after her newborn baby.)
   
   Going on maternity leave is just one of many things that can cause people to end up struggling to make payments, even though at the time of borrowing, they thought that they would have no trouble paying back the loan. Other reasons for being unable to make payments could be having an accident that leads to someone being unable to work, an unexpected expenditure such as a laptop breaking or simply finding that, after essentials like food and travel have been paid for, there is not enough money left.

6. Show Slide 5.

   Unfortunately, debt cannot be ignored in the hope that it will go away. When someone falls behind on repaying a debt, companies often charge a fine. If the situation continues, companies may even send a bailiff to the house to demand payment and take away someone’s possessions if they can’t pay. If a bailiff goes to a house, the person in debt can be charged £300 or more for the visit, which only makes things worse.

7. Show Slide 6.

   Let’s hear more of Jacob’s story.
   
   Read, or ask a student to read, the second part of ‘Jacob’s Journey’.
   

   Jacob’s family are left with just enough money to cover the basics each month. Even so, they receive phone calls about late fees and interest charges on their debts. They have to make a lot of compromises. Jacob doesn’t get to socialize with his friends any more because he can’t afford the bus fare to go and see them.
   
   Jacob is very conscious of the household budget. He hates having to ask his parents for money, even for his lunch, worrying that he is taking too much. His parents are always stressed nowadays, and this makes Jacob feel anxious about what is going to happen to them, as well as causing arguments in the family.
   
   Jacob feels like his friends get to do whatever they want, while his family’s choices are significantly restricted. He’s sad that he’s stuck at home with nothing to do and feels like he’s losing his connection with his friendship group.

   This doesn’t sound like much fun, does it? Have a think about how you would feel if you were living in this situation.

   Pause to allow time for thought.

8. Show Slide 7.

   Struggling with debt makes people feel depressed, anxious and stressed. Young people growing up in families who struggle with debt are five times more likely to suffer from low well-being than those in households that are not in debt, putting them at risk of developing mental health problems.

9. Young people living on their own for the first time are particularly vulnerable to falling into debt. The Children’s Society works to try to stop this from happening to young people.

   Ask the students, ‘What would you do in the following scenario?’

   Show Slide 8. Read through the question and allow time for thought. Click for the answer (the correct answer is C).

   Saving is a really good habit to get into, not just when we are saving to buy something particular, but in general for ‘a rainy day’. Unexpected expenditures or job losses can happen at any time, and having money in savings creates a buffer, ensuring that you don’t fall into debt if something goes wrong. Putting aside a small amount each month will soon add up.

10. Show Slide 9.

    Keeping track of our spending and understanding how much money we can spend each day or week is very important. However, for some people, especially families, certain situations can mean that they can’t help falling into debt. The Children’s Society is a children’s charity that is working to increase awareness about the debt trap and its effects on the mental health of children and young people. The charity is asking the government to create a ‘Breathing Space’ scheme that will give parents and young people time and space to repay their debts with no rising fees or visits from bailiffs. The Children’s Society hopes that there will be a change in the law so that families and young people in debt are given the time and space to get their finances back on track.

11. Show Slide 10.

    Let’s hear the last part of Jacob’s story.

    Read, or ask a student to read, the third part of ‘Jacob’s Journey’.

    Jacob’s family have been put on the ‘Breathing Space’ scheme. Extra fees and charges have stopped piling up, and his parents have been put on a debt repayment plan. Now they just make one affordable payment each month and aren’t hassled by creditors all the time.

    Jacob’s parents are a lot more relaxed now, and this makes him feel much less anxious. The family’s finances are well on their way to being back on track, and Jacob gets to see his friends again.

Time for reflection

Show Slide 11.

Explain to the students that if they, or people they know, are going through anything that sounds similar to Jacob’s story, free help is available. They can talk to a teacher or phone Childline, but there is also a free debt advice charity called StepChange that can help families to get their finances back in order. Their website is available at: www.stepchange.org

Prayer
Dear Lord,
Thank you for helping me.
Thank you for helping my friends.
Thank you for all the good things you give.
Amen.

Song/music

‘Money, money, money’ by Abba or ‘I need a dollar’ by Aloe Blacc