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Millions struggling to pay council tax and other essential bills

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Millions of people are struggling to pay essential bills such as rent and council tax, according to a new financial inclusion study.

Nearly one million people are behind with rent, while more than a million are behind on water bills, research from the University of Birmingham and the University of Lincoln shows.

Nearly 1.6 million people are falling behind with council tax payments, with six in ten people in the poorest fifth of the population reporting they are in problem debt.

The study found that nearly 2.2 million people were contacted by bailiffs last year.

It also highlighted a growing number of personal insolvencies with more than 70,000 Individual Voluntary Arrangements (a formal alternative to bankruptcy) made in 2018, up from 40,000 in 2015.

Karen Rowlingson, professor of social policy at the University of Birmingham and co-author of the report said: “The government is saying that austerity is over but our research shows that millions of people are still struggling to pay essential bills.  Much more needs to be done to increase income levels to help people make ends meet.”

According to the report, the number of people without a bank account has reached an all-time low of just over one million.

It said some financial institutions are making strong efforts to provide basic bank accounts, but others are doing “relatively little”.

Overall, banks are making an estimated £2.4bn in revenue from unarranged overdrafts, with people in deprived areas more likely than others to pay fees, the study said.

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