Citizens Advice - One in seven fall behind on essential household bills

Some one in seven (14%) of people have fallen behind on essential bills [ 2.2 mb] - including energy, water, mobile phone and broadband bills, council tax, rent or mortgage payments - the equivalent of seven million people in the UK, according to new research from Citizens Advice.

A poll of 6,004 people, conducted by ICM Unlimited for the charity, also reveals 60% of people with children under 18 report having already cut down on any regular or non-essential spending, to ensure their children don’t go without. 

Citizens Advice’s research indicates the situation is particularly tough for certain groups. Black and ethnic minority (BAME) groups, parents and carers, and people who were furloughed are all more likely to have fallen behind.

• 28% - twice the UK average - of BAME people are behind on essential bills or rent. This rises to 31% for Black people.

• A quarter (26%) of those with children under 18 in their house are behind on essential bills or rent

• 24% of people who were furloughed have fallen behind on essential bills or rent

A majority (62%) of the UK population believe that those who’ve fallen into debt because of coronavirus and lockdown restrictions should get help from the government to pay it back. This view has majority support across all regions of the UK, age groups and socio-economic backgrounds.

The number of people Citizens Advice helps with debt is climbing as economic hardship worsens and protections for people unable to pay essential bills have weakened since the first lockdown. 

Citizens Advice is calling for targeted help for people who’ve built up debts because of a pandemic no-one could have planned for. The government should focus on council tax and rent arrears where the consequences for non-payment are most severe and the levels of debts are greatest. For rent arrears, the government should consider a system of grants and government-backed loans - comparable to schemes in Scotland and Wales - to help people pay back their rent arrears sustainably and stay in their homes.

Case Study

Stephanie* runs a small holiday letting business and, prior to the pandemic, was making a healthy income. However, because her income was classed as rental income, she was not eligible for any help from the government’s income support schemes. Her income has plummeted to around £500 a month.

Her husband has also been furloughed at 80% of his wage and this, along with her dramatic loss of income, has caused huge financial strain. The family savings have been long since used up and Stephanie has had to take on a bank loan to cover living costs.

At the start of the pandemic, she told her landlord that she was unable to pay her rent. A week later, she was given an eviction notice. The family is struggling to pay the rent in their new property, but Stephanie is scared to speak to her landlord in case the same thing happens again.

Stephanie says:

“A week after telling our landlord we couldn’t pay the rent on time, we were served an eviction notice, so we had to move which cost us money. I’m now trying to figure out how to pay next month's rent. I’m too scared to tell my landlord that I can’t afford the rent as I don't want to be evicted again. It costs money to move which we don't have.

“My outgoings are now even more because of the loan. The money I’m getting at the moment doesn't even cover the council tax and some bills, never mind rent, food and everything else.

“All my savings are gone and I’m at the stage now where I don't know what the next step is. We're not doing Christmas this year, nobody can afford it. We got food from the food bank last week and hopefully we’ll get some next week.

“All I need is someone in the government to look up and say ‘Hold on a minute all these people have been forgotten about. What are they supposed to do?’”

Alistair Cromwell, Acting Chief Executive of Citizens Advice, said:

“We agree with the British public that people shouldn’t be left on their own to sink or swim. 

“It has become increasingly clear that, despite the government’s best efforts to protect incomes, a growing number of people have fallen into debt because of the coronavirus pandemic. Some groups, notably ethnic minorities, parents and carers, and those furloughed, are suffering more than most. 

“The government has taken strong action to try to protect people from the worst of the immediate economic shock. Now they need a clear plan to protect people from the damaging consequences of long-term debt, and help strengthen the economic recovery.“

Citizens Advice’s six top tips to help with your debts

Work out how much you owe - Make a list of whom you owe money to and add up how much you need to pay each month. If you don’t have your most recent statements, contact your creditor to find out what you owe. Some creditors will have special arrangements for people with Covid-related arrears.

Prioritise your debts - Your rent or mortgage, energy and council tax are called priority debts as there can be serious consequences if you don’t pay them. Separate these and work out how much you owe. Speak to your creditor about what support might be available during the pandemic.

Work out how much you can pay - Create a budget by adding up your essential living costs, such as food and housing, and taking these away from your income. Any money you have spare can be put towards your debts. The Citizens Advice budgeting tool can help.

Paying urgent debts - You might have to contact priority creditors quickly in urgent situations, like if you are about to be evicted. Most tenants cannot be evicted without a court order, and there are currently extra protections in place which mean that you are entitled to up to 6 months notice. In most cases where the court has already made an order, evictions are paused until 11 January. Tell them you're seeking debt advice so you can find a way forward. You could try to pay them something if you can afford to.

Paying non-urgent debts - If you have any money left after paying priority debts, but not enough to make your usual payments, consider getting advice on the best way for you to start getting on top of your debts. Or contact your creditors and offer them what you can afford to pay.

If you can’t pay your debts - If you’ve got little or no money spare to pay your priority debts seek advice from Citizens Advice straight away. If you’re struggling to pay for basics like food, seek help immediately to see what support might be available to you.

Notes to editors

1. Stephanie’s name has been changed to protect her identity

2. ICM unlimited surveyed a representative sample of 6,004 adults living in the UK. The sample has been weighted to the profile of all adults aged 18+ in the UK and is weighted by age, gender, region, social grade, work status, and ethnicity. Fieldwork took place between 12 and 25 November.

3. 834 out of 6004 (14%) respondents said they were behind on any household bills or rent. Using the UK population estimate (Mid 2019: April 2020 LA Boundaries) of 52,673,433 adults (18+) in the UK, we can extrapolate that this has affected 7.3 million individuals.

4. In the three months September to November, Citizens Advice helped almost 85,000 people with debt issues, compared to over 66,000 in the period June to August. This is an increase of over 28%.

5. Breakdown of percentage of people who strongly agree or agree with the statement “Coronavirus, and the associated government restrictions, has had a negative impact on many households' financial situation. This can lead to debt (such as rent arrears, being behind on household bills, credit cards etc) that people might not be able to pay off. To what extent do you agree or disagree with the following statements? People who are behind on rent because of coronavirus should get help from the government to pay it back”. View Tables [ 11 kb]

6. Citizens Advice is made up of the national charity Citizens Advice; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.

7. Our network of charities offers impartial advice online, over the phone, and in person, for free. 

8. We helped 2.8 million people face to face, over the phone, by email and webchat in 2019-20. And we had 34.5 million visits to our website. For full service statistics see our monthly publication Advice trends.

9. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,600 service outlets across England and Wales.

10. Citizens Advice is the largest provider of free, multi-channel debt advice. Providing that help gives Citizens Advice unique insight into the types of debts people struggle with.

11. You can get consumer advice from the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 for Welsh language speakers.