The Government announced a consultation on council tax reform earlier this week, including a proposal that 12 monthly payments, instead of 10, becomes the default.
Peter Tutton, director of policy, research and public affairs at StepChange, said: “These figures today are unsurprising and point to a broken system [that] is repeatedly pushing the most financially vulnerable groups into hardship, as councils scramble to fund essential services against an incredibly difficult financial backdrop. As such, households across Britain have faced significant increases in their council tax payments, all coming at a time when other bills and general living costs are going up across the board. Despite the best efforts of some councils, local authorities lack a binding set of standards, which would create an environment to better support people in arrears facing financial difficulty.
“As it stands, existing practices around council tax debt collection only exacerbate financial difficulty and the reality is that the current system lacks compassion and clarity. Our previous research has consistently shown these debt collection practices are worsening people’s mental health and wellbeing – over four in five (85%) StepChange clients with council tax arrears said the communications they received from their council about their arrears made them feel scared, anxious or depressed.”
Carol Knight, CEO of The Investing and Saving Alliance (TISA), said: “Council tax arrears are a telling barometer of the nation’s financial health, and today’s figures clearly show that the pressure on household finances is rising. This echoes the FCA’s latest Financial Lives Survey, which revealed that one in four people have low financial resilience, with millions just one unexpected bill away from real hardship.
“The cost-of-living crisis is undoubtedly the main driver of this, but, unfortunately, people are also being forced to make impossible financial choices without access to the right guidance or support. It’s no wonder that this has left millions in arrears on their council tax.”
