English council tax debt said to be at record high

Debt charity StepChange has revealed the average person seeking its assistance has incurred £961 in council tax arrears in 2016, rising from £717 in 2011. This figure raises the question: what has changed for English households in those years?

Council tax benefits cut across England

The UK economy has experienced a period of transition between the coalition and Conservative governments, with £35 billion of cuts made by January 2015. In 2013, one austerity measure introduced was the removal of council tax benefits across much of England. Since then, most local authorities have introduced a minimum payment scheme to cover the shortfall.

In the first year, research organisation the New Policy Institute (NPI) reported 229 English councils asked prior benefit claimants to start making minimum payments towards their council tax bill. As of April 2016, NPI revealed a further 30 councils had implemented minimum payments at an annual estimate of £171 per claimant. 

For those who default on council tax payments, they face an additional £150 in court and administrative fees on top of what they already owe. Therefore, it is essential for English households to manage their finances as efficiently as possible to avoid further costs.

High-interest lending increases pressure

Benefit cuts have been a cornerstone of Chancellor of the Exchequer George Osborne’s economic policy since he took on the role in May 2010. Given the reduced financial aid, households are now seeking support from alternative sources, which can include high-interest lenders.

To highlight the situation, the Association of Chartered Certified Accounts (ACCA) released an April 2016 report to raise concerns that too many UK consumers are turning to loans and credit cards as short-term solutions. Fundamentally, the issue is that high-interest options can only increase financial strain if they are not paid off quickly.

In response, ACCA UK Head of Policy Anthony Walters has called for technology to be used as a means of decreasing debt, rather than simply making credit more accessible. However, until any changes are made, households need to make more informed decisions to keep pace with their council tax payments.

Dukes Bailiffs can offer guidance and payment solutions to help people struggling with council tax debts. If you need help, call 01785 825 500 to speak to a member of our team today.