In the UK today, one in 10 households - the poorest families - cannot get access to a bank account. When they run out of cash, which they do frequently in these tough economic times, the most vulnerable are lured into an unaffordable debt trap.
These parents have little choice. High street banks don't want them, they are financially excluded and they cannot take advantage of the low interest rate loans that most of us take for granted.
Those who benefit are the unscrupulous lenders who exploit the poor. Our latest report A Vicious Cycle; the heavy burden of credit on low income families exposes the scandal of credit providers who charge low income families up to two-and-a-half times, or 150%, more to rent-to-own basics like fridges and cookers than they would cost on the high street.
What's more they are not up front about their charges, leaving many in the dark to the injustice; a three-year rent-to-own arrangement with a well known weekly payment store could mean a family paying in excess of £1,074 for a standard fridge freezer, which could be bought for the much lower price of £430 if it's bought outright on the high street.
Barnardo's assists some of the most vulnerable families by giving emergency grants which help them avoid having to borrow money. Last year we donated nearly £370,000 to 1,600 people facing severe financial difficulty; £200 was given for two single beds for two children, one of whom was sharing a sofa bed with her mum while the other was sleeping on a mattress, £200 was granted for a cooker for a single mum who left her partner after suffering domestic violence and has two children, one of whom was being treated by Great Ormond Street Hospital, and £300 went to a family of five whose father had lost his job and was unable to afford oil to heat their home.
But there is only so much we can do as a charity. A Vicious Cycle suggests the government's strategy should rest on three key 'pillars':
• giving the right kind of help when it's needed by ensuring the poorest have access to low or free-interest loans and advice when they face emergencies
• reducing demand for high-cost credit by encouraging the poorest families to save up for essentials rather than borrow for them, and
• ensuring that all have fair access to mainstream financial services either through a bank or Post Office card account.
And we're calling on the Office of Fair Trading to build on its 2010 review of the high cost credit industry by enforcing stricter rules on the rent-to-own lenders that would compel them to display the high street equivalent prices of the products they sell clearly.
Without this, families will continue to struggle unfairly at the hands of this morally bankrupt lending industry and they will not be able to free themselves from the vicious cycle of debt.