The Hidden Debt in Your Household
16th August 2018
Every year, UK households are sweeping more and more debt under the carpet, and it’s getting harder and harder to stamp the lumps down. As a nation, we’ve racked up close to £19 billion in debts already, and it could easily keep getting worse with time.
What causes most household debt?
We’re not even talking about the usual suspects of payday loans and credit cards here. For the most part, this rising debt mountain comes down to things like unpaid household utility and Council Tax bills.
According to research from the Citizens Advice charity, missed bill payments alone are up by 34% since 2010. They’re actually a heavier debt than credit card balances right now, and a lot of us are struggling under the load.
Even normal household bills can have serious consequences. Utilities can be cut off and families can be kicked out of their homes if they fall behind in the rent.
On top of everyday bills, the UK’s starting to owe the government a lot of money these days. Unpaid fines, penalties and tax are up and British families are digging themselves even deeper into debt trying to handle them. It’s certainly understandable that people want a fast solution when they get a threatening letter from HMRC.
How are people dealing with their household debt?
In many cases people's stop is leaping to credit cards and personal borrowing, but in doing this they’re just trading one debt for another. Depending on the terms and interest rates they sign up for, the chances are they’re only making things worse.
In fact, we really haven’t seen this kind of leap in borrowing since the banks collapsed. The rate at which we’re taking on debt is way ahead of our average pay rises. Meanwhile, high inflation is still forcing up the cost of living for most of us. Add that to the ongoing benefit cuts we’re seeing and you’ve got an ideal breeding ground for unmanageable debt.
What do we owe the Government?
Just looking at what we owe the government right now is pretty eye-opening. In 2017, UK households owed over £13 billion in overpaid benefits and tax credits and underpaid council tax. £10 billion of that is down to the government demanding back cash it paid out by mistake.
There are several ways these mistakes can happen. They’re not always the taxpayer’s fault, but that’s who always feels the pain of them. Fines and penalties only twist the knife, and can easily end in a very uncomfortable visit from the bailiffs.
Is the Government trying to help?
The government still makes occasional noises about giving “breathing space” to British families with lower taxes and a higher minimum wage. That’s not going to help much if the final demands are already on the doormat, though.
The thing is, a lot of these problems could be shrunk down or even wiped out if people claimed back what the taxman owes them.
Could you be due a tax refund to ease the pressure of debt?
About 5 million people in the UK pay too much tax each year. In fact, some have been doing it all their working lives! RIFT claimed HMRC refunds for over 10,000 people last year, with an average payout of over £3,000 for a 4-year claim.
What’s more, claiming with RIFT keeps both you and your money safe. As long as you play by the taxman’s rules, your refund’s fully protected by the unique RIFT Guarantee. That means we’ll fight your corner if HMRC challenge the amount we’ve claimed. If they demand any of your refund back, we’ll pay it ourselves at no cost to you.
The best way to help kill off a debt problem is with a tax rebate from HMRC. Talk to RIFT today to get your claim rolling.