Hidden Debts: The growing problem of being behind on bills and in debt to the government

Our latest report,  'Hidden debts' 951 KB , reveals the growing problem of people being behind on bills and in debt to the government.

The rapid growth of unsecured household debt since 2016 has rightly attracted the attention of government and regulators. However, that attention often ignores a large stock of hidden debt - money owed to government and essential service providers.

Since 2014, it has been more common for people to come to Citizens Advice for help with household bill debts - such as council tax or energy bill arrears - than with problems related to consumer credit debts.

Last year we helped people with 690,000 household bill debt problems, compared to 350,000 consumer credit issues.

One reason so many more people struggle with household bill debts is the way they are collected. Of the problems we helped people with last year, household bill debt problems were nearly twice as likely to be related to the way debts are collected than consumer credit debt issues (29% compared to 15%).

Since 2011/12, the number of problems we see that are related to the way household bill debts are collected have more than doubled, while household bill debt problems that aren’t related to the way those debts are collected have remained stable.

In particular, problems related to the way bailiffs collect debts have grown rapidly. The number of bailiff problems we have helped people with increased by over 6,000 in the last 12 months and by 24% since 2014/15.

Despite the scale of the problem, household bill debts are often ignored by policy makers. Partly, that is because no single organisation is responsible for measuring the level of that debt. We estimate the total level of household bill debt - owed to essential service providers and government - to be nearly £19 billion.

The government needs to get a clear picture of the scale of problem of household bill debt. It should commit to measuring the level of debt on household bills and to government - in the same way the Bank of England records levels of consumer borrowing.

The government also needs to take action to protect people from aggressive collection practices when they do fall behind on their bills. A first step would be to introduce independent regulation for bailiffs.