Government ‘must measure’ household debt as stats expose billions owed

First time estimate by Citizens Advice shows missed bill payments overtaking credit card spending as the key money problem faced by consumers.

Debt-money-chart-houses

Households owed more than £10bn last year in tax credits and benefits where the government had overpaid them and then demanded repayment new stats show.

Citizens Advice says the sums owed show a need for government to now measure levels of household debt in a similar way to the Bank of England’s monthly statistics on consumer and mortgage lending.

The stats compiled by Citizens Advice are a first time estimate on the overall amount owed by falling behind on essential bills – with missed bill payments overtaking credit card spending as the key money problem faced by consumers.

Last year, Citizens Advice helped 690,000 over household debt problems, compared to 350,000 for consumer credit issues.

Using government records and making its own estimates from helping more than 690,000 people with household bill troubles last year, Citizens Advice said as much as £18.9bn was owed to the government and utility companies for bills such as water, gas and electricity, as well as unpaid taxes and fines.

As concerns grow over the rapid growth of personal borrowing on credit cards, loans and overdrafts in the UK – reaching levels unseen since the financial crisis – the Bank of England responsible for tracking the rise in borrowing from high street banks has no official figures for missed bill payments.

Citizens Advice want government committed to measuring and reporting levels of household debt on an annual basis – with tighter regulation of bailiffs.

Gillian Guy, the chief executive of Citizens Advice, said there was an “air of institutional indifference” over household debt.

“Government must get a grip on the scale of this debt by accurately measuring and publishing the figure on an annual basis,” she said.

A vast majority of the overall debt uncovered related to bills owed to the state – over £10bn last year in tax credits and overpaid benefits alone.

Councils were owed almost £3bn in council tax arrears, water companies £2.2bn and gas and electricity suppliers almost £1.1bn.

To Citizens Advice that’s the biggest increase since 2011 in the proportion of debt issues it helps with since 2011, with the figures showing those helped with household bill problems tend to be in a more precarious financial position than those with consumer credit debts.

That breaks down further to one person every 3 minutes coming to Citizens Advice for help with bailiff issues – demonstrating the need for an independent bailiff regulator to address aggressive collection practice.

 

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