Government must take household debts seriously, Citizens Advice says

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Government must take household debts seriously, Citizens Advice says

Friday 12 October 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.