Reduce your council tax bill

Important info

This article is for general guidance only and is not financial or professional advice. Any links are for your own information, and do not constitute any form of recommendation by Saga. You should not solely rely on this information to make any decisions, and always obtain independent, professional advice for your own particular situation. All figures and information in this article are correct at the time of publishing, but laws, entitlements, tax treatments and allowances may change in the future.

Council tax bills are due to go up from 1 April – and the average bill is likely to rise by 5%. But did you know you might be missing out on council tax discounts that could reduce your bill?

It’s estimated there are 541,000 people of pension age in the UK missing out on council tax support, worth on average £1,670 per year, according to data analytics company Policy In Practice. A further 1.7 million people of working age are thought to be missing out, with claims worth on average £1,464 a year.

There are also reductions and exemptions worth hundreds of pounds a year for those with dementia and other severe mental or physical conditions and those who live with them.

Use our step-by-step guide below to understand your council tax bill and find out what reductions you might be eligible for, and how to challenge your council tax band and potentially save yourself more money.

How much is council tax?

From April 2025, council taxes are due to rise. By how much will depend on your location and local authority. The Government’s limit on how much local authorities can increase bills is set at 5% for the coming year (that’s 3% for core council tax cap and an additional 2% for local authorities with adult social care responsibilities).

The average band D council tax in England for 2024-25 is currently at £2,171, according to government statistics, so a 5% increase might add around £108 to the annual bill – taking the total to £2,279.

However, some cash-strapped councils at risk of bankruptcy have sought approval for increases that are considerably higher (10-25%). According to a new investigation by the Daily Mail, this is likely to affect around 4.4 million residents in eight local authorities.

Caroline Abrahams, charity director at Age UK, says:  “The cost-of-living crisis is far from over.  The recent rise in energy costs this month and predicted additional rises to energy and council tax from April will no doubt add to the financial challenges many older people continue to face.” 

Council tax rises for second home owners

From 1 April 2025, if you own a second home in England, you can be charged twice your normal council tax. Your council will decide whether the property is a ‘second home’ and whether to charge you this additional tax. Similar laws have already been rolled out in Scotland and Wales.

Council tax discounts and reductions

Discounts and reductions worth 25% to 100% off your council tax bill are available, based on various qualifying factors.

Council tax reduction

If you’re on a low income or certain benefits, your bill could be reduced by up to 100% through Council Tax Reduction (also called Council Tax Support). Around £900m in council tax support for those on a low income or certain benefits goes unclaimed each year, says Deven Ghelani, director at Policy in Practice.

“Pensioners should check their eligibility using a benefits calculator and apply by contacting their council. The simplest way to claim may be to start by applying for Pension Credit, which is worth £3,900 per year on average for eligible households, and is your passport to a range of other support including council tax support.”

You need to apply directly to your council for Council Tax Reduction. There is a different scheme in Northern Ireland.

Council tax discounts

These are some of the circumstances in which you could get a discount:

If you’re the only ‘qualifying’ adult in the house, you can get the single person discount. This entitles you to 25% off your council tax bill.
If you can demonstrate that your home has been adapted specifically for a disabled person, you can apply to drop a council tax band.
If you’re a carer looking after someone in your household for at least 35 hours a week, you may qualify for a discount. The person being cared for must be getting a qualifying benefit (such as Attendance Allowance or Disability Living Allowance).
You may qualify for a discount if you or someone you live with has a learning difficulty or is severely (and permanently) mentally impaired, for instance with dementia. (You’ll need a doctor’s certificate and the person needs to be claiming a benefit such as Attendance Allowance – people with dementia will often be eligible for this or a related benefit.) One issue is that if someone in the household has advanced dementia, for example, their loved ones often have other things on their mind than council tax. “Carers often struggle to find their way through the complex systems of benefits, especially at a time when someone they love has been newly diagnosed,” says Paul Edwards, Chief Nursing Officer at Dementia UK.
If you’ve moved into a care home or hospital long-term, you don’t need to pay council tax on your empty property.
If a property is empty because the owner has died, it’s exempt until someone new moves in, or probate is granted.

To apply for a discount, you need to ask your local council, either by filling in a form or applying online. Some councils might let you apply by telephone. The gov.uk website has information about applying and how to find your local council’s website.

You can find out more about these reductions and discounts and how to apply at Citizens Advice, AgeUK and DementiaUK.

New pound coins on a council tax bill — Image credit: Shutterstock/ Zhanna Hapanovich

What if I can’t pay my council tax?

Figures from the StepChange charity suggests that nearly one in four UK adults are worried about their ability to pay council tax over the next six months, with typical arrears amongst its clients of £1,937 in 2024.

If you’re struggling to pay, contact your council straight away as the consequences can quickly become serious. You may be eligible for a council tax reduction or ‘discretionary’ reduction. Speak to a free debt advisor at Citizens Advice, Stepchange or Age UK.

If you’ve already missed a payment, as long as you pay within seven days of the first reminder, the debt will be cleared. But if you don’t, the situation can rapidly escalate. Within three weeks of missing just one council tax payment, you could receive a final demand to pay your full annual council tax bill within seven days.

For an average UK household, this could mean a missed £140 payment turns into a bill for £1,668 just three weeks later. Continued failure to pay can result in the council applying to take the case to court.

A coalition of charities and campaigning groups are currently calling on the Government to reform the system and make it less punitive for people who are struggling to pay their council tax.

How to pay council tax

Council tax is one of the largest monthly expenses for many over-60s. You pay direct to your council. Methods can vary between councils, but typically you can pay by direct debit, online, by cheque, over the phone or in person. You can also use ‘Paypoint’, ‘Payzone’ or ‘Quickcards’ for cash payments at post offices, banks, newsagents and convenience stores.

If you’re in England or Wales, you can find a link to the council tax part of your council’s website from gov.uk. In Northern Ireland, you can pay your rates online, by phone or cheque, or with a standing order or direct debit from your bank account, or in person at the post office.

Council tax is typically paid over 10 months, with February and March payment-free, both for administrative reasons and to give householders a break after an expensive season.

“Most councils still allow you to pay in 12-month instalments instead of 10, to spread the cost. Just ask your council if they offer this,” says Nicholas Hill, senior advice manager at the Money and Pensions Service

Council tax bands

All homes in the UK are banded by value. This determines what you pay in council tax. In England and Scotland, bands are based on the value of your property in 1991 – bands are from A to H). In Wales, council tax bands are based on property values in 2003 – bands are from A to I.

You can check your council tax band via gov.uk for England or Wales or saa.gov.uk for Scotland.

How to appeal your council tax band

Up to 400,000 people in England and Scotland are thought to be on the wrong valuation bands and could be owed thousands in overpaid council tax, according to estimations from the consumer website MoneySavingExpert. (Homes in Wales were revalued more recently, so are less likely to be inaccurate.)

Before you rush to apply for a review, it’s important to check that a reassessment won’t put you (and your neighbours) in a higher band. Use the guidance at MoneySavingExpert to see how your banding and valuation compares with comparable neighbour properties first. If you think you have a case, apply for a review at gov.uk.

It’s easier to challenge your banding if you’ve lived in the property six months or less, or if there have been significant changes. You can still make an informal challenge if you’ve been there longer, although in Scotland this is more difficult.

Watch out for council tax scams

Watch out for messages saying you’re entitled to a council tax refund or offering to write-off arrears and asking for your bank details.

If you receive a call like this, put the phone down straight away. Your local council will never phone you out of the blue to discuss a council tax rebate or ask you to pay an advance fee, says Action Fraud. Legitimate council tax communications are usually by letter, not phone call or text message.

For advice, ring the Action Fraud helpline on 0300 123 2040.

How council tax works

Council tax is an annual tax on domestic property that was first charged in April 1993 in England, Scotland and Wales to replace the much-loathed community charge (also known as the ‘poll tax’).

Households in Northern Ireland pay a similar property tax to council tax, called rates.

The money raised from council tax helps councils to pay for a whole range of services, such as adult and children’s social services, social care, education, police and fire services, roads, street lighting, libraries, waste collection and many other local services.