One month on from what has been dubbed "Awful April" — following a sharp surge in living costs — Debt Free Advice has revealed a stark rise in household debt levels. Council tax arrears have now overtaken rent as the most common debt among those seeking help.
New figures from the London-based debt support service reports a notable increase in case volumes in May 2025, compared to the same period last year. This marks a clear escalation in financial distress as families face mounting bills, stagnant wages, and a rising cost of essentials.
For the first time, council tax has overtaken rent as the top non-utility debt among those seeking help – a significant shift that highlights the growing pressure on household budgets. However, utility debts remain the most common overall – a reflection of widespread struggles with essential services.
The percentage of cases involving council tax, rent, and water arrears have all increased compared to May 2024, signalling deeper and more widespread affordability challenges across the capital.
The data paints a concerning picture of post-April realities for many Londoners. The surge in utility, rent, and council tax costs following annual price hikes has pushed thousands closer to financial crisis.
Awful April didn’t just squeeze budgets – it tipped thousands into crisis. We’re now helping more people with more debts, and basic bills like council tax and water are at the centre of it.
This is no longer about poor budgeting – it's about survival. Without increased support, especially for essentials like housing and utilities, more households risk falling into severe and long-term financial hardship.
Debt Free Advice is warning that without urgent action, more households will spiral into long-term financial hardship. The service is calling on local councils, utility providers, and national government to bolster early intervention strategies and better protect vulnerable households from falling behind on essential payments.
If you’re behind on your council tax or utility bills, or concerned about making future payments, please get in touch with us as soon as possible.
Call 0800 808 5700 to speak to an expert advisor. We're open everyday, from 8am to 8pm.