Myles Fitt is the Strategic Lead for Financial Health at Citizens Advice Scotland.
This column was first published in the Herald on 17 January 2022.
With the New Year bells now something of a memory, my thoughts are turning towards another type of new year – the new financial year in the spring which will likely see even more pressure piled on household budgets as energy bills, national insurance and potentially council tax all rise.
The difficult Spring follows what has already been a hugely challenging winter, as the crisis in the energy market combined with reductions to Universal Credit to create a perfect financial storm for the thousands of households who were already experiencing money problems or who were just manging to get by.
If people are struggling to cover all their outgoings because of rising costs or falling incomes, debt will be lurking around the corner. What we have seen for a number of years now at Citizens Advice Scotland is that the biggest debt issue the network sees isn’t pay day lenders or credit cards, but council tax debt.
In the financial year of 2020/21 1,422 people sought help from the Citizens Advice network with a complex debt issue involving council tax, owing a cumulative £4.1 million in council tax arrears.
A complex debt issue is where someone owes multiple debts. Worryingly, the average debt owed was £2,925.84– two and a half times the average council tax bill of £1,198 while the figures for the first two quarters of 2021/22 show this figure creeping even higher, with an average debt of £3,513.01 and a total debt of over £3.5million.
Taken together, this means CAB clients have seen over £7.6million in council tax debt over the course of the pandemic.
The good news here is when it comes to council tax is help is out there for people, and many will qualify for the Council Tax Reduction scheme, which could see their bills reduced or in some cases even exempted entirely from council tax. Lots of people don’t realise they’re entitled to a Council Tax Reduction. There’s a whole range of exemptions and reductions and just qualifying for one doesn’t mean you won’t qualify for another.
That’s why Citizens Advice Scotland created www.checkmycounciltax.scot which allows people to check if they are entitled to a Council Tax Reduction. We also built www.moneymap.scot during the pandemic which rounds up all the online options people have to boost their incomes or cut their bills.
Getting more money in people’s pockets is what the network has been doing for over 80 years. During the pandemic CABs unlocked £147 million for people.
But income maximisation will only go so far for some people, who will need specialist debt advice. And the network is there for people there too, with specialist debt advisers who can help you work out a repayment plan. Our advice is confidential, impartial and free. The Citizens Advice service will never charge people for advice and that’s a really important point as when you are facing the stress of money and debt worries it can be easy to sign up to plans that charge for help. We will never do that.