More households fall behind on basic bills - what to do if you're struggling

A recent report from the Resolution Foundation paints a bleak picture of household finances in the UK. More families across the UK are struggling to keep up with basic bills, with middle class families feeling the pinch as well.

That said, it’s not all bad news.

Consumer debt has decreased

There’s some good news for households in the UK; average consumer debt has fallen on the whole. Consumer debt is the money people borrow to pay for everyday things; it includes credit cards, personal loans, or buying something on finance. It doesn’t include mortgages, though.

This type of debt has dropped by 14% in real terms between 2006 – 2008 and 2020 – 22. For higher income households, it fell by 21%. When we say “real terms”, we mean the numbers have been adjusted for inflation, so they show the true value over time.

But more families are falling behind on priority bills

Across the UK, families are falling behind on priority bills at a worrying rate. Priority bills are the key bills every family should aim to pay first, because the consequences of falling behind can be significant. They include things like your energy bills or council tax.

However, the Resolution Foundation’s report suggests that it’s exactly these bills people are falling behind on. The data states that:

• council tax arrears have risen from £4.6 billion in 2019/2020 to £6.7 billion 2024/25; an increase of almost 50%
• energy arrears have also increased sharply with over 1million electricity accounts and 900,000 gas accounts in debt.
• middle income families are falling behind at faster rates; a decade ago, fewer than 1 in 20 were behind on a priority bill, today that number is closer to 1 in 10.

These findings are concerning but there are steps you can take if you’ve fallen behind on priority bills.

What to do if you’re struggling with your energy bills

If you’ve fallen behind on your energy bills, you’re in “arrears”. Energy bills are treated as priority bills because energy is essential. If things escalate, your gas or electricity supply can be cut off.

But, there are ways you can make sure this doesn’t happen. If you’ve fallen behind, you should:

• get in touch with your supplier – the sooner you tell them you’re struggling, the sooner they can work with you to find a solution
• talk to them about a payment plan – suppliers can work with you to decide what you can afford so you can cover your arrears and any ongoing use
• ask about grants – a number of suppliers offer hardship funds or grants that can help struggling customers
• offer to repay through your benefits – if you get certain benefits, you can use the Fuel Direct scheme where a fixed amount is sent straight from your payments to cover arrears

What to do if you’re struggling with your council tax bills

The council has extensive powers to recover council tax debt, so this is another priority bill you shouldn’t ignore. That said, if you’re struggling, there are things you can do:

• get in touch with the council – don't wait to get a bill reminder, call them immediately to explain why you can’t pay, and they may be able to offer solutions
• check if you’re eligible for discounts – Citizens Advice offers lot of helpful tips on how to pay less council tax if you’re eligible
• see if you can pay in 12 instalments rather than 10 – councils can split payments in 12 instalments to make them more manageable if you’re struggling

Falling behind on priority bills can spiral quickly. But there’s support available out there. So, if you’re struggling, get in touch with your supplier and explain your situation. There are usually things they can do for you.