The amount of people consulting the Citizens Advice Bureau (CAB) about tax credits has increased by 14 per cent over the past year.
A freedom of information request by the Independent and the False Economy campaign group has found that there are 4.7 million cases where people have been overpaid their tax credits.
This amounts to around £1.6 billion and the government is keen to recoup it, on occasion using private debt collection services to get the money.
Gillian Guy from the CAB notes that "tax credits are there to make sure people get a decent standard of income, but the sharp rise in debts from overpaid tax credits suggests this policy is having the opposite effect".
In the 2013/14 tax year, the organisation dealt with close to 30,000 cases relating to the credits.
In the same year, HMRC wrote off close to 6,000 cases due to the financial situation of the person who had been overpaid, but if you`re not quite in that position, you may want to look into methods of paying back any large amounts that are required from you.
To pay large amounts homeowners can consider using secured loans or remortgaging if needed to meet your obligations, if they cannot raise the money from saving or unsecured finance.
With secured loans, you can settle your immediate debts in one go and leave yourself with a longer period to pay back the money.
However, this will mean that you`ll end up paying more in interest as a result.
So it`s a case of balancing out your immediate cash requirements versus the longer term payment implications.
At First Choice Finance, we`ll try to minimise that by identifying the most suitable deal from our limited panel of secured loan lenders.
If you`re happy with what we can source, we`ll proceed as quickly as we can.
Discover more about our no-obligation free quotes on secured loans and remortgages at firstchoicefinance.co.uk or call us on your landline via 0800 298 3000, but if using your mobile call 0333 003 1505.
Homeowner Secured Loans
Rates From 7.1% APRC
Representative Example £30,000 over 72 months @ £679.90 repayments. Total payable of £49,949. 20.1% APRC including £2,975 intermediary fee and a £995 lender fee. Loans secured on property.
First Choice are tied to certain loan providers.
Mortgages & Remortgages
Borrow £80,000 over 25 years
At 4.6% Variable, £461.95 for
300 months. Total Payable
£138,585. Total Cost Of
Credit £58,585 (incl £1360 fee).
Unsecured Personal Loans REPRESENTATIVE 49.9% APR (VARIABLE)
First Choice are tied to certain unsecured lenders.
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