CAB News 05 July 2019

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CAB News 05 July 2019

Friday 05 July 2019

Our research on debt and the energy supply market featured in the national media today.

National

Debt

Councils look to take unpaid tax from debtors’ wages

FT.com (subscription required), 04/07/2019, Naomi Rovnick

Our research showing the average person who approaches Citizen Advice over problems with council tax payments has just £14 of monthly disposable income, has been quoted by the Financial Times.

The government is considering allowing local authorities to deduct unpaid council tax debts directly from people’s wages, in a move that could shore up councils’ finances and reduce their reliance on bailiffs, says the FT.

Energy

Britain’s energy regulator rolls out tougher rules for new suppliers

Reuters, 04/07/2019, Susanna Twidale

Picking up the Pieces – our recent report that estimated the unpaid costs relating to the collapse of 10 energy firms since January 2018 at £172 million pounds – has been used by Reuters.

The news agency used the figures in its story about new regulations governing companies preparing to enter the energy market.

The heat is on: Swap your energy supplier this summer before the best deals disappear

Mail Online, 30/06/2019, Laura Shannon

Image result for the heat is on energy

Our energy star rating is quoted in the Financial Mail on Sunday, and on its partner website This is Money, as part of a report on how to get the best fuel deal.

“Customers need to take care about which supplier they stick with or switch to,” said the article.

“The latest rankings from charity Citizens Advice show that a quarter of energy companies fail to achieve half marks for customer service.

Its star ratings are based on complaints, call waiting times and ease of switching.”

Energy consumers switched to costly deals after firms go bust

The Times, 01/07/2019, p.2, Emily Gosden (subscription charge may apply)

Our report, Picking up the Pieces, into the costs to consumers from the collapse of 10 energy suppliers since January 2018, was quoted by The Times.

Energy correspondent Emily Gosden was reporting on how customers of failed energy suppliers often find themselves transferred to an expensive default tariff when they are switched to a replacement energy supply company.

The article then moved on to discuss the wider issue of dealing with energy suppliers who go bust:

“Citizens Advice said last month that customers faced a potential bill of £172 million for covering credit balances and other unpaid industry debts for defunct suppliers.”

National Grid completes sale of gas network to CIC-backed group

FT.com, 30/06/2019, Donato Paolo Mancini (subscription charge may apply)

The Financial Times drew on our earlier research into energy networks, in a story about the sale of the gas company Cadent to a Chinese backed consortium.

“Consumer group Citizens Advice has complained of what it calls “eye-watering” and “unjustified” profits, with network distribution costs making up a large part of the average household energy bill,” said the FT.

Universal Credit

Thousands of dying people missing out on benefits because illnesses not deemed critical enough

The Sun, 03/07/2019, Katie Binns

Citizens Advice gave the example of a terminally-ill single mother who was forced to stop working due to her illness to illustrate the problem of the “six-month rule.”

The mum fell into nearly £3,000 of rent arrears while waiting for a Universal Credit payment and had to rely on the help of friends and family.

The Sun says tens of thousands of terminally ill people and their families are ending up in debt because of the “outdated” rule that you must only have six months or less to live to get fast access to benefits.

A “damning” new report by MPs is calling on the government to ditch the stipulation, which they say was invented by politicians, and has no clinical evidence to support its use.

The Huffington Post also used our case study in its coverage of the story.

Consumer Advice

Can you get a refund if a gig has bad sound?

The Guardian, 29/06/2019, p.34, Miles Brignall and Rupert Jones

Why do so many stadium and arena gigs seem to be plagued by terrible sound? And what are your rights when it comes to getting a refund, asked The Guardian.

The paper quoted the advice on our website which makes it clear: “you should complain if there’s a problem with the quality of the sound”. It says you should first contact the ticket seller or venue for a refund.

In other news

A quarter of UK betting shops could close, with 12,000 jobs at risk.

One in five councils face drastic spending cuts within months.

Mobile users can now switch providers with one simple text.

Crown estate faces tenants’ anger over rent hikes, evictions and repair delays.


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Citizens Advice responds to new Universal Credit figures

Friday 07 June 2019

The government has published new figures that show the number of people with outstanding Tax Credit overpayments who have moved onto Universal Credit.

Gillian Guy, Chief Executive of Citizens Advice, said:

“These new figures show the staggering number of people who get money deducted from their payments when moving from Tax Credits onto Universal Credit.

“Deductions can be made to repay previous overpayment debts, but these can be from years ago and often come as a surprise. They can also come on top of other deductions leaving some people unable to cover their essential costs.

“Our evidence shows that many people on Universal Credit are already struggling. Half of the people we help while waiting for their initial payment are unable to keep up with bills or rent – so any deductions can push people over the edge.

“More than a million people claiming Tax Credits are expected to move onto Universal Credit in the next stage of the rollout. The government must ensure that people have enough to live on and make sure that any debt collection is affordable.”

The new government figures show:

Some 570,000 of the 2 million people claiming Universal Credit are repaying Tax Credit overpayments through deductions from their Universal Credit.

In the latest month, 1 in 5 (410,000) people claiming Universal Credit had money deducted directly from their payment.

New data shows that median average overpayment debt is £610. Some people have considerably higher debt, resulting in a mean average of £1,560.

In practice, rules allow Tax Credit overpayment deductions of £47.67 a month for a single person over 25, or higher for people who are in work, meaning that it could take more than a year to repay average Tax Credit overpayment debts.

Background:

  • Citizens Advice helped people with nearly 10,000 Universal Credit deductions issues in the year to March 2019.

  • Tax Credits overpayments will usually be deducted at 15% (25% if you are working) of the Universal Credit standard allowance – £47.67 a month for a single person over 25.

  • A quarter of Universal Credit claimants had a deduction of more than 20% of their standard allowance in October 2018. This can result from money being deducted for multiple reasons at the same time.

  • After advances, benefit overpayments were the second most common driver of deductions in October 2018.

  • 10% of all the money awarded in Universal Credit in October 2018 was taken in deductions.

A recently released DWP report found:

  • Three quarters (75%) of those with Tax Credits overpayments said they only discovered they had been overpaid after their UC claim had started.

  • Over a third (38%) were ‘having financial difficulties’ – classified as those falling behind with some, or many, bills and commitments. Among this group, around 6 in ten (62%) said their difficulties started in the same month or after they began claiming Universal Credit.