One in four people behind on at least one bill, as UK households fall £22 billion in the red
Citizens Advice is helping almost 40,000 people every month with debt issues - with those requiring help increasing 21% between the second and third quarters of 2023
Citizens Advice estimates UK households are behind on bills to the tune of £22 billion but warns the number could be much higher
One in four people in the UK (27%) are currently behind on at least one bill with Citizens Advice warning the situation only looks set to deteriorate in the coming months.
Citizens Advice estimates household debt, covering things like essential bills and benefit repayments sits at £22bn. But the charity warns the true figure is likely to be much higher as not all debts, such as water bill and rent arrears, are monitored.
The number of people who are in a negative budget, where their income doesn’t cover their essential costs is increasing. Citizens Advice has found 21% of people have borrowed money to pay for essentials, such as groceries, in the last six months. Energy debts and council tax arrears are now the most commonly encountered problem debt - with 50% of the people helped by Citizens Advice reporting one or both of these debts.
Sinking further into the abyss
Citizens Advice says people’s situations are becoming increasingly complex as basic costs, such as food or energy bills, outstrip their sources of income each month. Against a backdrop of rising costs, advisers are warning that once people are in debt, they’re finding it extremely difficult to get out of the red as the debts stack up.
Since 2019, there has been a 38% increase in the number of people coming to the charity for help with debt who are in a negative budget with new groups - such as those in employment and mortgage holders - now seeking support.
Currently the average person the charity helps with debt is £28 in the red at the end of the month while, four years ago, they had a surplus of £21.
Solutions needed, not new problems
Current systems contain too many traps and hurdles for people in debt to get a fresh start.
If someone misses just one council tax payment they can become liable for a wholeyear’s bill, a scenario which often results in bailiffs knocking at their door. The high level of benefit deductions can eat away at people’s income pushing them into negative budgets, a sure-fire way of slipping into debt. While those seeking a way out of debt are met with upfront fees for debt relief, pricing them out of the right solutions for their situation.
Citizens Advice is calling for reforms to how debt is collected and managed so that people can pay back what they owe in an affordable way, rather than being pushed further into the red by aggressive and punitive practices.
Dame Clare Moriarty, Chief Executive of Citizens Advice, said:
“We’re now seeing the levels of debt we feared and the picture is only set to get worse.
“Millions of people are doing their best to balance the books but the numbers simply don’t add up. Too many people are living on empty, unable to pay their bills or even put food on the table.
“Current systems are stacked against people in debt, instead we need an approach that offers more support and realistic routes out of debt.
“We need to see reforms that will have a tangible impact. The ball is the government’s court to take action now to avoid debt becoming the lasting legacy of the cost-of-living crisis.”
Notes to editors
- New report from Citizens Advice, ‘Debt time bomb: countdown to a household debt disaster’, available on request pre-embargo and on the Citizens Advice website thereafter.
- Behind on bills and borrowing figures based on analysis of an online poll conducted by Walnut Unlimited for Citizens Advice. A nationally representative sample of 4,269 adults aged 18+ in the UK were surveyed. The figures have been weighted and are representative of all UK adults (18+). Fieldwork was conducted between 2nd — 22nd June 2023. Additional sample boosts were included for Universal Credit claimants and People of Colour to ensure representative data for these groups. Walnut’s social research team is a member of the British Polling Council and abides by its rules
- Citizens Advice estimated total UK household bill debt using the following administrative data sources from 2022/23:
- Council tax: DLUHC collection rates for Council Tax and non-domestic rates in England, Scottish Government Council Tax Collection Statistics, and Welsh Government council tax collection rates.
- Energy: Ofgem debt and arrears owed by domestic customers for >91 days online report (accessed 24/8/23).
- Telecoms: Ofcom Pricing trends for communications services in the UK report.
- Benefits overpayments: DWP annual accounts.
- Tax credit overpayments calculated combining totals from HMRC and DWP annual accounts reports. The DWP total tax credits debts were combined with the year end HMRC tax credit debt stock (which accounts for tax credit debt transferred to DWP). In 2019/20, DWP and HMRC were owed £1,775 and £4,843 million for tax credit overpayments respectively. In 2022/23, DWP and HMRC were owed £2,513 and £2,963 million respectively.
- Council Tax arrears are often collected using aggressive collections practices, such as bailiffs. Citizens Advice is calling for a reform of how these debts are collected as well as the removal of upfront fees for debt relief options.
- Citizens Advice is made up of the national charity Citizens Advice; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
- Our network of charities offers impartial advice online, over the phone, and in person, for free.
- Citizens Advice helped 2.55 million people face to face, over the phone, by email and webchat in 2021-22. And we had 40.6 million visits to our website. For full service statistics see our monthly publication Advice trends.
- Citizens Advice service staff are supported by more than 18,500 trained volunteers, working at over 2,500 service outlets across England and Wales.
Citizens Advice is the largest provider of free, multi-channel debt advice. Providing that help gives Citizens Advice unique insight into the types of debts people struggle with.
You can get consumer advice from the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 for Welsh language speakers.