While the government celebrated a record budget surplus today (August 21), ordinary people are barely keeping their heads above water in a sea of outstanding household debt approaching £19bn, new figures show.
Citizens Advice, a network of charities which give people free advice on financial, legal and consumer problems, said outstanding debt included £7.5bn in tax credit overpayments, £2.84bn in council tax and £2.2bn in water bills.
Household debts have now exceeded consumer debts as the main problem that people contact Citizens Advice over. The charity noted that household debts often have more devastating consequences than consumer debts because people are at risk of having essential services cut off, being evicted or even facing prison if they fall behind on council tax payments.
Citizens Advice highlighted one case in which a retired couple, who had never missed household payment before, fell behind on some bills and owed £700 in council tax. Bailiffs were sent who were very aggressive, demanding they pay up and threatening to call the police. The couple are now afraid to open the door.
The charity says it helps people with bailiff-related problems once every three minutes – a 24 per cent rise since 2014, when the government first introduced reforms that were meant to protect people from aggressive and unfair practices.
“Families are living in fear of a visit from the bailiffs, and small missed bills can skyrocket through excessive enforcement fees,” said Citizens Advice chief executive Gillian Guy.
“Our evidence shows aggressive tactics by bailiffs cause huge distress and can even push people further into debt,” she added. “Families are going without essentials like food or electricity to meet their payments.
“The Ministry of Justice has already announced a call for evidence into aggressive collection practices by bailiffs. They must use this to take strong action and introduce an independent bailiff regulator to fix this broken system.”
Unite assistant general secretary Steve Turner agreed.
“Households are struggling to keep their heads above the water and pay the bills thanks to this cruel Conservative government,” he said. “Tory cuts to in-work benefits and a historic slump in wages have left people’s wallets running on empty and forced into debt to make ends meet.
“With the highest level of personal debt in Europe we need to do more to stop people from getting into crippling levels of debt by boosting the minimum wage and reversing the government’s callous cuts to our social security safety net,” he added.
“We also need tough action against unscrupulous debt collection agencies who prey on people’s misery to ramp up the debt through interest and fees, as well as stamping out the intimidating tactics of some bailiffs employed in the more unsavoury elements of the sector.”