Tax credit issues ‘pushed many into debt’

Problems surrounding the distribution of tax credits to families around the UK have seen many forced closer to debt management disaster, according to a recent study by Citizens Advice.

The charity found that 80 per cent of tax credit claimants had been overpaid and seven in ten said the resulting process of having these funds recovered put serious pressures on their household finances.

“Some reported having to go without basic items such as clothing and baby milk, taking out loans to pay the rent, getting into debt and having to rely on other family members to step in to pay for food,” the Citizens Advice report explains.

While for other people who had to repay money mistakenly given to them had no option but to “sell or re-mortgage their homes”.

Citizens Advice revealed recently that record numbers of British consumers are approaching its staff for debt advice.