Council tax arrears ‘piling pressure on indebted Brits’

March 16, 2015

Council tax arrears are becoming an increasingly serious source of debt problems for a growing number of households around the UK, according to a new report.

Figures from the charity group StepChange suggest that more than a quarter (28 per cent) of people with problem debts around the country now count council tax arrears among their chief financial concern. The figure was at 10 per cent as recently as 2010.

Furthermore, the typical scale of council tax debt among those people feeling the financial squeeze is up to £832 as compared with £675 four years ago.

According to StepChange, these issues are being made much worse for people in debt in part because local councils throughout Britain have been put under increased pressure to collect council taxes more promptly than ever before.

Specific councils in the UK are threatened with being “named and shamed” if they fail to retrieve council taxes in the year that they become due for payment and this situation is said to have prompted more “aggressive enforcement” measures to be pursued in many cases.

Indeed, StepChange has expressed concern that councils are resorting to using bailiffs to retrieve taxes owed as a default position whenever significant amounts are left unpaid.

The charity reports that threats of court action and bailiff involvement have become considerably more common in recent years, with relatively few people who owe council taxes being offered affordable payment plan options.

Among those people fending off bailiffs and threats of court action in relation to unpaid council taxes, the result in 92 per cent of cases has been added stress and anxiety, while for 63 per cent the issue is putting an added strain on family life, according to StepChange.

“It’s shocking that many councils are less likely to be helpful to people in debt than banks are, and are more likely to take people to court,” noted Mike O’Connor, StepChange’s chief executive in a statement.

“Councils need to pursue debts but they must have a responsible and proportionate approach to dealing with people in arrears and not default to aggressive enforcement that often only serves to deepen debt problems,” he said.

According to StepChange, the rise in the scale of debt-related concerns caused by council tax arrears in recent years has only been matched by the spread of payday loan-related debt problems among British consumers since 2010.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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