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Government must take household debts seriously, Citizens Advice says

11 Hydref 2018

In July, the Treasury Committee published its Household Finances report.

Commenting on the government’s response to the report today, Gillian Guy, Chief Executive of Citizens Advice, said:

“Treasury has failed to address the recommendations in the MP’s report.

“Firstly, they should measure and report household bill debt each year. We’ve shown this is possible by revealing a hidden debt problem worth £19 billion.

“Secondly, the government must improve the way it collects that debt. As a start, the MOJ must use its call for evidence into aggressive collection practices to introduce an independent regulator for the industry.

“These issues are causing real harm to people. It's time the government started taking this seriously.”

Background

Figures from Citizens Advice show

  • UK households owe £18.9 billion to essential service providers and government in arrears. This includes tax credit overpayments of almost £7.5 billion, £2.84 billion owed to local authorities in council tax arrears and £2.20 billion owed to water companies.

  • Household debt has now overtaken consumer credit as the key money problem people bring to Citizens Advice.

  • Last year we helped people with 690,000 household bill debt problems, compared to 350,000 consumer credit issues.

  • Since the  2014 reforms were brought in to protect people from unfair practices by bailiffs, Citizens Advice has seen a 25% rise in issues. Last year we helped 1 person, every 3 minutes with a bailiff issue.

Citizens Advice is calling for:

  • The government to commit to measuring the levels of household debt. The government should collect and report annually on the level of debt to government and to essential service providers in a similar way to the Bank of England's monthly statistics on consumer and mortgage lending.

  • The bailiff industry to be independently regulated. The Ministry of Justice should use its announced 'crackdown on rogue bailiffs' and 3 year review of the 2014 Taking Control Regulations, to bring bailiffs and bailiff companies under an independent regulator.

People who are concerned about their finances can contact Citizens Advice for budgeting and debt advice.

Notes to editors

  1. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  2. The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  3. To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
  4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
  5. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
  6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.