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.