Council Tax is Now the No. 1 Source of Britain’s Debt Problems

Council Tax is Now the No. 1 Source of Britain’s Debt Problems

More people are seeking help for council tax arrears than any other form of debt throughout Britain, announced Citizens Advice.

As many as 12% of people contacting Citizens advice say that council tax arrears are the debts they are most struggling with, and the charity dealt with almost 200,000 cases in the 2014/2015 financial year alone.

Citizens Advice projected a rise this year in council tax debt issues of 20% from 2013/2014, up to 191,400 individual cases.

However, the actual rise exceeded expectations, with cases rising to over 193,000 – an increase of 21% in a year.

This is on top of a 17% rise in cases of people seeking help after falling behind with their council tax bills in 2014, with 27,000 people seeking help in the first 3 months alone. The charity blamed this rise on the scrapping of council tax benefit in April 2013, saying since then they’ve seen “council tax arrears problems go through the roof.”

This is not just an issue affecting those out of work or on benefits. Out of the people who contacted Citizens Advice over council tax arrears, 42% were employed and 28% were unemployed, with the rest providing full-time care or in a similar situation.

The number of people seeking help for debts such as credit or store card debt and personal loans has seen a steady decline, allowing council tax arrears to take the number one spot.

While this may be due to fewer people borrowing irresponsibly, causing the drop in some forms of debt, rising costs of living and wages failing to keep up with inflation are putting increased pressure on household finances.

While some forms of debt, such as heating bills, credit card debt and personal loans, can be influenced, council tax is fixed according to which valuation band your local council deems you to live in. It was the huge rise in people struggling to keep up payments and cover their living costs that has pushed council tax arrears to the nation’s number one debt worry.

On top of facing council tax debt, many people who cannot pay are being lumbered with court fines that plunge them further into debt.

For example, when a local council hands your debt over to a bailiff, the company will apply for a ‘liability order’ that will allow them to withdraw outstanding debts directly from your wages or auction off your possessions. When this is granted, you will be automatically charged a 10% penalty fee.

The chief executive of Citizens Advice, Gillian Guy, said: ““For people struggling with the day-to-day costs of housing and heating, it can be difficult to cover the cost of fines.”

But, “The bailiffs who enforce the magistrate court fines need to recognise the difference between those who can’t pay and those who won’t pay when collecting money.”

You are not alone…

As with many forms of poverty, council tax arrears and other forms of debt are inextricably linked with mental health issues.

Research has shown that 73% of people who have contacted Citizens Advice have felt stressed, anxious and even depressed due to the weight of their outstanding debts and the problems debt cause.

Don’t suffer in silence

If you or someone you know are, like so many others, struggling to pay council tax arrears, please request a callback from one of our specialist debt advisors.

If you require urgent advice on council tax arrears, bailiffs or to help you get out of your outstanding debts, please call us on 0203 811 0585.