Arrears on energy and council tax bills are the most common debt problem facing households across the country, with Citizens Advice revealing 50% of people it helps are behind with one or both of these outgoings.

The charity said it is helping 40,000 people a month with debt issues – a 21% increase between the second and third quarters of 2023.

It is also seeing new groups of people seeking support, with those in employment and mortgage holders having negative budgets where their income doesn’t cover their essential costs.

For one in five people, they’ve borrowed money to pay for essentials, such as groceries, in the last six months.

From surplus to debt

Currently the average person the charity helps with debt is £28 in the red at the end of the month, while four years ago, they had a surplus of £21.

The charity estimates household debt, covering things like essential bills and benefit repayments sits at £22bn, but warns the true figure is likely to be “much higher” as not all debts, such as water bill and rent arrears, are monitored.

Further, it said people’s situations are becoming “increasingly complex” against a backdrop of rising costs, meaning they’re finding it extremely difficult to get out of the red as the debts stack up.

Indeed, last month, YourMoney.com reported that millions of households were at risk of falling further behind on energy bills before the winter has even begun, due to addressing arrears on previous months’ bills.

Meanwhile, the charity said the current systems contain “too many traps and hurdles” for people in debt to get a fresh start as it highlights that if someone misses just one council tax payment they can become liable for a whole year’s bill, which could include bailiffs knocking at their door.

‘Pushed further into the red by aggressive and punitive practices’

Clare Moriarty, chief executive of Citizens Advice, said: “We’re now seeing the levels of debt we feared and the picture is only set to get worse.

“Millions of people are doing their best to balance the books but the numbers simply don’t add up. Too many people are living on empty, unable to pay their bills or even put food on the table.

“Current systems are stacked against people in debt, instead we need an approach that offers more support and realistic routes out of debt. We need to see reforms that will have a tangible impact. The ball is in the government’s court to take action now to avoid debt becoming the lasting legacy of the cost-of-living crisis.”