Huge jump in number of people struggling to pay Council Tax

The number of people seeking help with their Council Tax bills rocketed last year.

Last year we helped 45,561 people with arrears on Council Tax, up from 25,500 in 2012, a 77% increase.

As the UK’s leading debt charity we help people with all manner of debt problems. These range from credit cards, high interest payday loans, problems with bank loans, overdrafts and hire purchase agreements.

When advising clients we always look first at any arrears on Council Tax as this has to be treated as a priority payment, alongside things like rent, mortgages, utility bills and other essential household costs.

Bailiffs and benefits

The rise in these figures coincides with the changes in Council Tax benefit across England last year. The benefit has been replaced with localised Council Tax Support. It’s estimated that due to this change 2.4 million (already struggling) low income families had to pay an average of £138 more Council Tax in 2013/14.

Local councils use court bailiffs to enforce the payment of Council Tax and the changes in bailiff law next month potentially add an additional burden for those struggling with Council Tax payments.

Under the new laws, people with Council Tax debts could have £310 added to their debt simply through bailiffs making a single visit to their home.

Council Tax and priority payments

Council Tax arrears are always treated as a priority payment, to be paid before unsecured debts such as credit cards or loans. Our advisors often have to give emergency advice to people with court bailiffs at their front door.

We help all our clients by putting together a detailed income and expenditure budget which helps pin-point the best debt solution. We always explain the difference between priority and non-priority bills, however some clients are not aware of the consequences of non-payment of priority debts.

More support for those struggling

We’re hoping that local councils will offer more support for those struggling to pay their Council Tax. Ideally we’d like to see that local councils signpost those struggling towards free debt advice agencies and charities.

We’d also like to see councils be more accepting of reasonable repayment offers, particularly when the person struggling has taken debt advice. Most of all we’d like councils to afford people breathing space when they’re struggling to repay.

Our chief executive Mike O’Connor said: “More and more people are struggling to pay essential household costs. Stagnating incomes, changing work patterns, rising living costs and changes in welfare benefits are a toxic combination.

“Government, business and charities need to ensure that safety nets and protections are in place to ensure that short-term financial problems do not escalate into problem debt which can blight the lives of individuals, families and whole communities.”

What to do if you’re struggling with Council Tax

As with any type of debt problem if you’re unable to pay your Council Tax in full each month you should seek free and impartial advice straight away.

You can get this help by calling us or using our confidential online Debt Remedy tool. Debt Remedy takes 20 minutes to complete and will help you put a budget together and then determine what the best debt solution is, and your next steps.

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