Families face 'tidal wave' of debt, warns think-tank with a plan to protect them from the bailiffs

·2-min read
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Families face a “tidal wave” of debt including at least £4 billion in unpaid council tax as Covid restrictions lift, new research has shown.

The study by the Centre for Social Justice (CJS) showed more than 2.4 million are now in “severe debt,” equivalent to one in 25 people and up from 600,000 before the pandemic.

The amount of outstanding council tax alone grew by a record 24 per cent between March 2020 and March 2021, when it hit £4.4 billion, according to the analysis of official data by the CJS.

Some seven million people - more than one in ten of the population - anticipate problems paying off their council tax debt.

“What looms ominously on the horizon is no less than a tidal wave of debt,” concluded the CSJ report entitled Taking Control for Good.

“As payment deferrals and the furlough scheme end, the Money and Pensions Service anticipate a 60 per cent rise in the demand for urgent debt advice . . . [and] councils will undoubtedly be ramping up efforts to recover the £4.4 billion of arrears sitting on their balance sheets.

“What this means in practice is that, in the months and indeed years ahead, tens of thousands more people are expected to receive a call or knock at the door from a bailiff.”

In response, the CSJ has put forward plans to strengthen protections for households facing debt by bringing together organisations representing enforcement firms and charities devoted to helping hard-up families.

The two groupings will form a new independent new body – the Enforcement Conduct Authority (ECA) – to stamp out harmful debt collection tactics and help vulnerable people in arrears get their finances back on an even keel.

The initiative, engineered by the Centre for Social Justice (CSJ), has been welcomed by the Government and was hailed as a “stunning achievement” by former Cabinet minister Nicky Morgan.

“The ECA’s potential is unlimited. With a strong mandate to ensure the fair treatment of people in debt, it will provide independent, fair and formal supervision of enforcement,” she said.

“Developing new protocols on vulnerability and affordable repayment, the ECA will ensure that people experiencing enforcement are put on a more sympathetic and sustainable path out of debt.”

Andy Cook, Chief Executive of the CSJ, said:“Problem debt ruins lives. It tears families apart, places a strain on employment, and can even lead people down a path to alcohol and substance dependency.”

“The Enforcement Conduct Authority developed by the CSJ with the debt advice and enforcement sectors will empower bailiffs to carry out their duty to courts, creditors and taxpayers fairly, while equipping them with the tools to support vulnerable people on a sustainable journey out of debt.”

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