9. Problem Debt

Levels of problem debt are widespread with 3 million people falling behind with essential bills, particularly council tax. Debt collection and management practices also need attention given growing concern about bailiff practices and rising numbers of Individual Voluntary Arrangements.

9.1  We have very little reliable data on problem debt but the Family Resources Survey of 2017/18 suggests that 3 million people were behind with any of gas, electric, water, rent, mortgage or council tax debt at some point in the last year. Of these, council tax debt is the most widespread, with nearly 1.6 million people behind with it. More than 4 million people were also behind with water rates, rent and/or electricity bills in 2017/18. Arrears on consumer credit were less common though still affecting millions of people.

Source: Family Resources Survey

9.2  According to the 2018 JRF Poverty report, six in ten people in the poorest fifth of the population report that they are in problem debt, most commonly falling behind with Council Tax payments, rent or utility bills.

9.3  In 2017, Citizens Advice helped people with 690,000 household bill debt problems, compared to 350,000 consumer credit issues. 

9.4  According to Citizens Advice in 2018, 2.2 million people report being contacted by bailiffs in the last two years and more than a third of these - 850,000 people - have experienced bailiffs breaking the rules, including:

  • refusing to accept affordable payment offers or pressing people to make unrealistic offers.
  • misrepresenting their rights of entry, for example by threatening to break in where they do not have the power to do this.
  • taking control of goods inappropriately, including exempt items and goods which don’t belong to the person who owes the debt.
  • acting aggressively and unsympathetically towards people often in vulnerable circumstances

9.5  The number of insolvencies continues to grow each year, driven particularly by the increase in IVAs from 40,000 in 2015 to over 70,000 in 2018.

Source: UK Government statistics

9.6  The number of accelerated tenant evictions (repossessions) has continued to decline while evictions by social landlords remains stable and there has been a slight increase in evictions by private landlords in the last year.

Source: UK Government statistics