Council Tax debt now biggest problem for households

The number of people seeking help with Council Tax arrears has ‘rocketed’ according to Citizens Advice.

The number of people in Council Tax debt has ‘rocketed’ according to new figures from Citizens Advice.

Between January and March 2014, the charity helped 27,000 people in Council Tax arrears, up 17% compared to the same period last year.

Previously credit card and unsecured personal loans were the most common types of debt the charity was approached about. But now its figures show Council Tax arrears has become the number one problem for households.  

What’s behind the rise?

Citizens Advice said the number of people struggling with their Council Tax bill had gone "through the roof" after benefit changes were introduced last year.

In April 2013 as part of the Government’s raft of welfare reforms Council Tax Benefit was abolished and replaced with localised Council Tax Support.

So now instead of Whitehall making the decisions, local authorities have to set up and run their own Council Tax Support schemes and have a reduced budget with which to do it.

Citizens Advice says the changes mean the level of support offered to people now varied from one council to the next.

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The 'tipping point' for households

In March debt charity StepChange reported it had seen a 77% rise in the number of people struggling with Council Tax arrears over the past year.

And now Citizens Advice has further evidence of households struggling with its own set of figures.

The charity said it found working households were most likely to fall into arrears. 42% of those that turned to Citizens Advice were employed compared to 28% unemployed, while 30% were not working due to their health, caring responsibilities or retirement.

It also found those with Council Tax issues were struggling with other debts too.

21% had an unsecured personal loan issue, 18% had a fuel debt problem, 16% had credit, store & charge card issues while 5% also had a mortgage or secured loan concern.

Citizens Advice Chief Executive Gillian Guy said Council Tax bills could be the "tipping point" which could plunge a household into debt. She urged councils to ensure resources from the Council Tax Support scheme are made available to those who are most in need.

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What to do if you’re struggling

Council Tax arrears are classed as a priority debt, which carry serious consequences for failure to pay.

Your local authority can apply to take repayments from your benefits or wages, instruct bailiffs to visit your home and could as a last resort send you to prison for what you owe.

So if you’re struggling to pay your Council Tax bill you should seek help straight away.

Read Where to get free debt advice.

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