Millions of households will pay much more as local authorities scramble to raise all the money they can. Yet some pensioners and people on low incomes don’t need to pay council tax at all, and should urgently check their eligibility for support.
The Government has once again allowed all councils in England and Wales to increase bills by three per cent for the 2024/25 tax year.
Those with social care responsibilities can charge a further two percent on top of that, without having to put their decision to a local referendum.
If all councils hike bills by the maximum allowed, they would increase by five percent in total. That would cost taxpayers an extra £2.1billion next year, according to the Institute for Fiscal Studies (IFS).
Some bills are rising by a staggering 21 percent due to local authority mismanagement.
The average Band D council tax bill set by local authorities in England in 2023/24 was already a hefty £2,065, after being increased by £99 or 5.1 percent on the 2022-23 figure of £1,966.
A five percent increase on top of that would lift the average bill to around £2,168. Charges will vary dramatically around the country and many face much bigger bills.
Latest figures showing consumer price inflation stood at four percent in the year to December, so a five percent rise would be a real terms increase.
Some experts think that inflation could fall below two percent in April, which would see council tax bills rise at more than double the pace of prices, extending the cost-of-living crisis.
This makes it even more important to check whether you can get financial support towards your bill or wipe it out altogether.
Millions could be eligible for a state benefit called Council Tax Reduction (sometimes called Council Tax Support). This replaced Council Tax Benefit in April 2013.
People could be eligible if they’re on a low income or claim benefits. If they are, their council tax charge could be reduced by up to 100 percent.
It makes no difference whether you own your home, rent, are unemployed or working, you may still be able to claim.
Each council runs its own scheme, so what you can get will depend on where you live.
Your personal circumstances play a key part, such as your income, who lives with you and which benefits you get.
Your savings, pension and partner’s income will also determine support levels.
Pensioners on low incomes should also check whether they are eligible for a vital benefit called Pension Credit. This tops up the earnings of a single pensioner to £201.05 a week and £306.85 for couples.
Crucially, Pension Credit also acts as a gateway to other State benefits, and this includes council tax.
Pensioners who receive the Guarantee Credit element of Pension Credit might get their council tax paid in full.
Those who do not receive Guarantee Credit may still get some support if they have a low income and less than £16,000 in savings.
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Pensioners who are disabled and receive Attendance Allowance to help with personal care may also be eligible for Council Tax Reduction.
Others may be entitled to up to 100 percent council tax support if they are entitled to a disability premium or disabled child premium, receive the Employment Support Allowance and a qualifying disability related benefit, or receive a carer’s premium.
If you receive a war disablement pension, war widows pension or war widower’s pension, or care for a child dependent under six, you may also get help.
Claiming all you can is vital as council tax bills are set to soar due to the enormous rise in the cost of social care and rising council wage bills.
The IFS said the costs facing councils are growing significantly faster than across the rest of the economy.
This is partly due to timing, as contracts with suppliers will be updated based on last year’s sky-high inflation figures.
The National Living Wage increased by 9.7 percent in April 2023 and is set to increase by 9.8 percent in April 2024, driving up wage bills among lower-paid workers.
Children’s social care, homelessness services and transport for pupils with special educational are rising rapidly.
Many are likely to raise council tax as much as they possibly can, so see what you can do to offset the cost.
There is lots of support are there. Start by visiting gov.uk/apply-council-tax-reduction.
