Citizens Advice is calling for better regulation of unaccountable bailiff firms as it reveals households have fallen behind on their essential bills, such as council tax and utilities, by an estimated £18.9 billion.

Last year, the charity helped one person every 3 minutes with bailiff issues. In 2014, the government introduced reforms which were meant to protect people from unfair practices. Yet since then, Citizens Advice has seen a 24% rise in bailiff problems. In July, MPs on the Treasury Select Committee said government and local authorities were “worst in class” for debt collection, and that bailiff use can cause additional problems.

Falling behind on household bills typically has more severe consequences than missing consumer credit repayments, like overdrafts and personal loans. People can face having their essential services cut off, can be kicked out of their home due to rent arrears or even face prison if they get behind on their council tax. Citizens Advice is concerned that aggressive tactics are also having serious knock-on effects, leading to further debt and mental health problems.

Citizens Advice says it has seen a significant increase in the proportion of debt issues it helps people with that are related to household bill debts since 2011. Since then, problems with these kinds of debts have overtaken the number of consumer credit issues that people are seeking the charity’s help with.

Its figures show the people it helps with household bill problems tend to be in a more precarious financial position than those with consumer credit debts. The charity says people with household bill debt were 37% more likely to be out of full-time employment and almost 1 in 3 people (34%) had a mental health problem.

Gillian Guy, Chief Executive of Citizens Advice, said “One person every 3 minutes come to us for help with bailiff issues. Families are living in fear of a visit from the bailiffs, and small missed bills can skyrocket through excessive enforcement fees. Our evidence shows aggressive tactics by bailiffs cause huge distress and can even push people further into debt. Families are going without essentials like food or electricity to meet their payments.”

“The Ministry of Justice has already announced a call for evidence into aggressive collection practices by bailiffs. They must use this to take strong action and introduce an independent bailiff regulator to fix this broken system.”

Figures from the charity show:

  • UK households owe £18.9 billion to essential service providers and government in arrears. This includes tax credit overpayments of almost £7.5 billion, £2.84 billion owed to local authorities in council tax arrears and £2.20 billion owed to water companies.
  • Household debt has now overtaken consumer credit as the key money problem people bring to Citizens Advice.
  • Last year we helped people with 690,000 household bill debt problems, compared to 350,000 consumer credit issues.

Citizens Advice is calling for:

  • The government to commit to measuring the levels of household debt. The government should collect and report annually on the level of debt to government and to essential service providers – in a similar way to the Bank of England’s monthly statistics on consumer and mortgage lending.
  • The bailiff industry to be independently regulated. The Ministry of Justice should use its announced ‘crackdown on rogue bailiffs’ and 3 year review of the 2014 Taking Control Regulations, to bring bailiffs and bailiff companies under an independent regulator.

British households owe almost £19bn in utility bills, missed council tax payments and overpaid benefits, according to figures revealing a hidden debt mountain facing the country.

Putting an estimate on the overall amount owed by people falling behind on essential bills for the first time, the estimate from Citizens Advice comes as UK households are under increasing financial pressure. The charity said missed bill payments had overtaken credit card troubles as the key money problem faced by consumers

Breakdown of the £18.9 billion calculation adds up according to Citizens Advice:

– Tax credit overpayments, £7.47 billion
– Council tax, £2.84 billion
– Benefit overpayments, £2.66 billion
– Water, £2.20 billion
– Rent arrears, £1.42 billion
– Electricity and gas, £1.09 billion
– Telecoms, £630 million
– Fines, fixed penalties, compensation orders, £610 million