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Water bills most common form of arrears for poorest families

The most common types of debt for those with low incomes are water bills and council tax, a report from the Joseph Rowntree Foundation shows.

Calum   Fuller

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Calum   Fuller
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Problem debt, defined in the report as being behind with any household bill or credit commitment, was reported by seven percent of households in the UK in 2016/17. However, one in six in the poorest quintile of households were behind with a household bill or credit agreement.


Figures from the Consumer Council for Water, the watchdog for water consumers, show that the number of people being put on to reduced rates for water bills, as a result of difficulties in paying, has risen by 50 percent over the course of a year, to almost 400,000.


More widely, the watchdog estimates around three million people are struggling with their water bills.


Andy White, senior policy manager at the Consumer Council for Water, said: “Water companies are doing more to try and help through schemes like social tariffs but awareness of this support remains far too low. About a quarter of households have told us they would be unlikely to contact their water company if they were worried about a bill. That tells us that companies are still not doing enough to convince their customers they are a source of help in times of hardship.”


The Joseph Rowntree Foundation’s measure of problem debt does not include debt on store cards, mail order payments and informal loans from friends or family. It does include: electricity, gas and other household fuel bills; council tax; phone bills; hire purchase; water rates; and rent or mortgage payments. It also includes credit card debt or other loan repayments.


The foundation’s study found those in the lowest income quintile are more than 1.5 times as likely to have problem debt than the second poorest fifth (10 percent), and more than 13 times more likely than the richest fifth where only one percent of households are in problem debt.


The proportion of households with problem debt has decreased slightly since 2012/13 and the proportion of households in the bottom fifth in particular declined from 22 percent in 2012/13 to 17 percent in 2016/17.


Between 2014 and 2016, the report said, one in three of those in the poorest fifth of households had no savings at all, while a quarter had savings less than £1,500. This is in stark contrast to those in the better-off parts of the population: most households in all other quintiles apart from the poorest fifth of the population have savings of more than £1,500.



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