Home Money Council tax arrears in England hit record almost £6bn as households struggle with rising bills

Council tax arrears in England hit record almost £6bn as households struggle with rising bills

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On the rise: The average council tax bill has risen to £106 a month this year
  • Outstanding council tax arrears have increased by 67 per cent in the last five years
  • Money Advice Trust calls for reform of debt collection practices
  • The average council tax bill reached £106 a month over the last year.

Council tax arrears in England have reached a record level of £5.97 billion, with an extra £488 million (or 9 per cent) now owed compared to last year, data suggests.

Outstanding arrears have risen 67 per cent since 2019, up from just £3.58 billion five years ago, according to data from the Department of Levelling, Housing and Communities.

For England and Wales combined, the figure has surpassed the £6 billion mark, reaching £6.2 billion as of March 31.

National Debtline said a third of callers are behind on council tax and it is the most common priority debt its advisers have heard about.

On the rise: The average council tax bill has risen to £106 a month this year

The charity said that on average callers owe £1,762 in arrears, which has increased 49 per cent from just £1,181 in 2019.

Council tax arrears are known as ‘priority debt’, meaning they must be paid before other debts, such as credit card debts.

With the average council tax bill rising to £106 this year, an increasing number are likely to be falling behind on their payments.

The charity warned that when combined with the cost of living, more people are at risk of facing financial difficulties.

Steve Vaid, chief executive of Money Advice Trust, said: “Council tax debt is on a worrying upward trend and the scale of arrears now underlines the need for urgent action.”

‘But this is nothing new. Council tax remains one of the most common debts among our National Debtline customers, and recent cost of living pressures have left many more people struggling to keep up with their payments.’

Ahead of the July election, the Money Advice Trust, which runs National Debtline, has called for council tax reform to improve collection practices.

It says this will reduce arrears and ensure low-income households get the support they need.

The charity said people should not be responsible for their entire annual bill if they fall behind on payments, and councils should offer affordable payment plans before resorting to other collection methods.

Currently, those who are in arrears are required to pay their entire annual tax bill if they miss a payment.

Those in debt can be sent to prison for up to 90 days if a court decides they have no good reason not to pay their tax bill.

The Money Advice Trust has also called for independent regulation of the bailiff industry to ensure fair treatment of those in debt.

“Councils play a vital role in helping residents with unmanageable bills and ensuring that council tax, crucial for funding local services, is collected fairly and affordably,” Vaid said.

‘Reforming collection practices should be a priority for the next government, including ending people being responsible for paying their entire annual council tax bill after falling into arrears.

‘I urge anyone worried about their council tax or any other bill to seek free, independent advice from National Debtline. Our advisors are here to help you and can explain your options.’

National Debtline provides free expert advice and can be reached on 0808 808 4000.

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