‘Number one debt problem' created by welfare reforms is council tax arrears

  • Research has revealed that council tax arrears are the number one debt problem that the government's welfare reforms have caused.

    The bedroom tax has caused the biggest public outcry, the number of people who are struggling with council tax payments has increased dramatically since council tax benefit was replaced by localised council tax support schemes in April 2013. Coins

    In the first three months of this year, 27,000 people with council tax arrears problems received help from Citizens Advice, which is a 17% increase on the same period of the previous year, reports 24dash.

    The charity has said that one in five people who contacted them with a debt problem also reported issues with paying their council tax. Previously, credit card and unsecured personal loans were the most common types of debt people approached Citizens Advice about.

    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%) had a credit, store & charge card issue

    •1 in 5 (21%) had also had an unsecured personal loan issue

    •1 in 20 (5%) had a mortgage & secured loan arrears issue

    •1 in 5 (18%) 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 focused on those who are most in need."

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