A new report published by a leading debt advice charity has shown an alarming increase in household bills in Scotland during 2020.
The ‘Scotland in the Red‘ report published by Stepchange shows that at least 50% of their clients were behind on at least one utility bill.
Household bills are generally classed as ‘priority debts’ and those types of debts should typically be paid ahead of ‘non-priority debts’ which tend to be credit card debts, unsecured loans and catalogue debts. However, the term non-priority is not intended to be implied that it is an unimportant debt that does not have to be dealt with. There are consequences for non-payment of any debt that you may owe.
Household Bills arrears broken down by type
Rent Arrears – The average arrears per Stepchange enquiry in 2020 was £1,230, a 43% increase from the previous year.
Mortgage Arrears – The average arrears per client enquiry was £3,667, decreased from the previous year but largely impacted by the availability of payment breaks from lenders.
Council Tax Arrears – An average of £1,975 per Stepchange enquiry and the most common individual household bill for their clients to be struggling to repay.
Electricity Arrears £1,239 (36% increase from the previous year) and Gas Arrears £823 (29% increase from the previous year)
Citizens Advice Scotland earlier in 2020 urged people struggling with council tax arrears debt to make use of the Scottish Government’s council tax reduction scheme.
The Scotland in the Red report also highlighted other key information about their Scottish clients such as the age and gender breakdown of clients who approached them for help.
58% of their new clients identify as female, and the most typical age group of client they spoke to was between the 25-39 age bracket (43%), an increase of 35% but this is largely attributed to younger age groups being more directly affected by the financial impact of the Coronavirus pandemic.
E.g. younger age groups tend to be employed more in the hospitality, leisure and non-essential retail sectors. Industries decimated by Coronavirus.
Average unsecured debt totals in Scotland
The reported average unsecured debt totals in Scotland rose from £11,712 in 2019 to £14,566 in 2020 which represents an increase of 24%.
It has been widely reported that many individuals across the UK are using credit cards and loans to pay off debts included rent arrears and council tax debts, therefore these figures are expected to increase once again.
Demand for debt advice in 2021 is expected to increase towards the end of the year, and with many payments breaks arrangements now ending, and with some now being replaced by tailored support, more people in Scotland may now be finding themselves with unaffordable ‘problem debt’ as a result.
In conclusion to the Scotland in the red report, Stepchange asked for Scottish government support and stated: “Whilst forbearance has allowed some households to prepare for, or weather the financial storms, the income shocks sustained by thousands of households in recent months will leave many financially vulnerable for years to come, even if they are able initially to avoid immediate detriment.
Supporting households in difficulty and preventing them from falling into difficulty in the first place, must be a primary focus for the new Scottish Government through the new parliamentary term.”
Help with unaffordable debts
If you are worried about potential enforcement action such as a visit from Sheriff Officers and wage arrestments over the non-payment of your household bills, including council tax arrears debt, call us on 0141 221 0999 and we will be able to find out more about your situation and offer advice on how to deal with your debts.
For people struggling with either their household debts and their unaffordable unsecured debt, it is important to deal with problem debt as soon as possible. Trust Deed Scotland recently reported that 25% of Scots wait 3 years before seeking debt help and while there are many reasons why individuals are allowing their problem debt to worsen, it is advisable to seek professional help.
Contact Trust Deed Scotland today for non-judgemental and confidential advice. Our experienced debt advice team offer tailored debt advice and will explain the advantages and disadvantages of any formal Scottish debt solution that you may be eligible to apply for.