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Council tax arrears now biggest debt problem reported to Citizens Advice

26 May 2014

One in five people reporting debt problems to Citizens Advice has a council tax arrears issue, the charity has revealed today.

New figures show that between January and March 2014 council tax debt was the number one debt problem the charity helped with.

Up until this year credit card and unsecured personal loans were the most common types of debt people approached Citizens Advice about.

The number of people struggling with council tax payments has rocketed since Council Tax Benefit was replaced by localised Council Tax Support schemes in April 2013. In the first three months of this year 27,000 people with a council tax arrears problem got help from Citizens Advice - a 17 per cent increase on the same period last year.

Council tax arrears are a serious problem for in-work households. Between January and March 2014, 42 per cent of those approaching Citizens Advice for help with council tax arrears were employed, compared to 28 per cent unemployed.

The analysis carried out by the charity found that people coming in with council tax issues are struggling with other debts too:

•1 in 6 (16 per cent) had a credit, store & charge card issue

•1 in 5 (21 per cent) had also had an unsecured personal loan issue

•1 in 20 (5 per cent) had a mortgage & secured loan arrears issue

•1 in 5 (18 per cent) had a fuel debt issue

Gillian Guy, Citizens Advice Chief Executive, said:

“For some households council tax bills can be the tipping point that plunges them into debt. Last year over 90,000 people came to Citizens Advice looking for help with council tax arrears as they struggle in the face of low incomes, rising prices and reduced financial support.

“Consumer debts like credit cards and personal loans have traditionally been the most common debt problems that come through our doors, but since the end of Council Tax Benefit we’ve seen council tax arrears problems go through the roof.

“As their budgets shrink local authorities are increasingly stretched, but they must ensure that the resources available for their local Council Tax Support scheme are focussed on those who are most in need.”

In April 2013 Council Tax Benefit was abolished and replaced by localised Council Tax Support. The support is available to people in and out of work, but levels now vary from one council to the next.  As of March 2014, 244 councils out of 325 councils in England require all working age households to pay at least some council tax, regardless of income. In Wales most people who received Council Tax Benefit now receive help via the Council Tax Reduction Scheme, though for many this may not continue beyond March 2015.

Citizens Advice Bureaux across the country work closely with their local authorities to ensure people are supported as best possible. Bureaux are in a unique position as a local barometer able to feedback the impact of local and national policies, spotting problems and working together to solve them.

Advice trends graph

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Citizens Advice

Notes to editors:

  1. 1.Between January and March 2014, 42 per cent of people getting help from Citizens Advice were employed, compared to 28 per cent unemployed. The remaining 30 per cent not working due to ill health, caring responsibilities or retirement.This year the Citizens Advice service celebrates its 75th anniversary. We’ve planned a year of activity running from January to December 2014. Contact the press office to find out more.
  2. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  3. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  4. To find your local bureau in England and Wales, visit www.citizensadvice.org.uk. You can also get advice online at www.adviceguide.org.uk
  5. You can get consumer advice from the Citizens Advice consumer service on 08454 04 05 06 or 08454 04 05 05 for Welsh language speakers
  6. Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 6.6 million problems from April 2012 to March 2013. For full 2012/2013 service statistics see our quarterly publication Advice trends
  7. Citizens Advice service staff are supported by more than 22,000 trained volunteers, working at over 3,000 service outlets across England and Wales.