UK families are struggling to pay essential bills amid £18.9bn household debt

The Citizens Advice study found people were falling behind on essential bills

UK families plunged into £18.9bn household debt last year, it has been revealed, with one person every three minutes seeking help for bailiff issues.

A Citizens Advice study showed that people are falling behind on their essential bills like utilities and council tax at an alarming rate. This typically has a more severe effect than missing repayments like credit cards, personal loans and overdrafts due to a lack of protections in place.

Those who are unable to pay household bills could have their utilities cut off, be evicted due to rent arrears or even face imprisonment if they fail to pay council tax.

Gillian Guy, chief executive of Citizens Advice, said: “Families are living in fear of a visit from the bailiffs, and small missed bills can skyrocket through excessive enforcement fees.

“Our evidence shows aggressive tactics by bailiffs cause huge distress and can even push people further into debt. Families are going without essentials like food or electricity to meet their payments.”

The study found that UK consumers owe £2.2bn to water companies, with electricity and gas bill debts estimated to be almost £1.1bn.

Cllr Richard Watts, chair of the Local Government Association’s resources board, responded to the report: “Councils understand the pressures some households are under and will support people who are in financial difficulty wherever possible. This is becoming increasingly challenging against a backdrop of welfare reforms and an overall funding gap that will reach almost £8 billion by 2020.

“No council wants to have to debt collect from its residents, particularly from people on low incomes, but local authorities have a duty to their residents to collect taxes which fund essential services, such as protecting vulnerable children, caring for the elderly, collecting bins, and keeping roads maintained. It’s essential that vital services are protected and that these funds are collected.”

In July, local authorities were blasted as “worst in class” for debt collection by Treasury Select Committee MPs, who also highlighted the additional problems bailiff use can create.

Reforms were introduced by the government in 2014 which were intended to stamp out unfair practices among bailiffs – but Citizens Advice have now reported a 24 per cent rise in such issues since the changes were put in place. The research drew on data from England, Wales, Scotland and Northern Ireland.

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The 2014 reforms meant that bailiffs could no longer enter a home outside the hours of 6am-9pm, enter when only children were present, take essential items like ovens and fridges or sell on debtors’ goods until seven days had passed since they were removed from the home.

Earlier this year, the Ministry of Justice announced a call for evidence of the impact of bailiff action on people in debt.

Russell Hamblin-Boone, chief executive of the Civil Enforcement Association – which represents private sector agents – said: “Of the £19bn debt identified in the Citizens Advice report, around 18 per cent qualifies for collection by certificated enforcement agents (bailiffs) and less than that is actually assigned to an enforcement agency.

“A visit by an enforcement agent is always the last resort. Agents are highly trained and must follow a process set out in detailed regulations to ensure that they collect unpaid council tax and court fines fairly.

“We work closely with the voluntary sector and under the regulations people are sign posted to debt advice, which accounts for the increase in numbers. But if anyone has strong evidence of bad practice we will investigate.”

Citizens Advice referenced a retired couple who “are now afraid to open their front door” after an aggressive visit from bailiffs who threatened the couple with the police if they could not pay the full amount owed immediately.

The announcement follows the release of Child Poverty Action Group research which showed that the National Living Wage (NLW) is failing to cover the basic needs of some families.

The study said that a single parent working full-time is £74 short of the necessary minimum income per week.

It explained that the NLW has only slightly adjusted national incomes after tax credit freezes, changes to welfare schemes and inflation.

The Citizens Advice study also showed that of the people with household debt, 37 per cent were more likely to be out of full-time employment and almost 1 in 3 had a mental health problem.

The charity has now called for the government to more effectively monitor levels of household debt, and for the independent regulation of bailiffs.