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Creditfix LB 03-2017

Hidden Household Debt Reaches £19 Billion

Households in the UK are estimated to owe nearly £19 billion in hidden household debt according to figures from Citizens Advice.

The charity has put an estimated figure on the household debt caused by utility bills, missed council tax payments and overpaid benefits, for the first time, and have said that missed bill payments had overtaken credit card troubles as the key money problem faced by consumers.

Citizens Advice arrived at the estimate by using government records and their own figures from helping over 690,000 consumers with household debt and bill troubles in 2017.

They have come to the conclusion that around £18.9 billion was owed to the government and utility companies for bills such as water, gas and electricity, as well as unpaid taxes and fines.

The vast majority of the hidden household debt Citizens Advice found was owed to the government. Households owed more than £10 billion last year in tax credits and benefits where the government had overpaid them and then demanded repayment, while councils were owed almost £3 billion in council tax arrears.

The charity also found that water companies were owed £2.2 billion by consumers falling behind with their bills, while electricity and gas providers were owed almost £1.1 billion.

Whilst the Bank of England compiles figures to track the rise in borrowing from high street banks and credit cards, there has never been any official figures concerning missed bill payments.

The charity has called on the government to measure and report on the levels of household debt on an annual basis.

Chief executive of Citizens Advice, Gillian Guy, said: ‘There is an air of institutional indifference as far as household bill debts are concerned. The government must get a grip on the scale of this debt by accurately measuring and publishing the figure on an annual basis.

Whilst the Financial Conduct Authority oversees formal arrangements for consumers concerning debts to banks and credit cards, bill payments being missed can have severe consequences. People can be cut off from utility supply, be evicted from their homes for rent or mortgage arrears, or even jailed for non-payment of council tax.

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