Struggling households face postcode lottery when it comes to council tax support

Struggling households face a huge postcode lottery when it comes to council tax support, new research shows.

Council tax support schemes provide discounts if you are on low income or claiming benefits - but a report from the University of Bath’s Institute for Policy Research (IPR) highlights how the rules vary widely across England.

There are currently 313 different locally administered schemes, each with different eligibility criteria and levels of support. In certain areas, some working claimants may receive reductions in their council tax bill of up to £125 per month, while comparable households elsewhere receive little or no support.

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The research also indicates that support for working households has gradually decreased over time, as council funding has been squeezed. In many schemes, assistance is withdrawn more quickly as earnings rise, or eligibility thresholds have not kept pace with living costs.

Council tax support is the most underclaimed benefit in England, according to separate research from Policy in Practice, with 2.7 million people missing out on around £2.8 billion of support.

Dr Rita Griffiths, a Research Fellow in the IPR, and lead author of the report, says: “Our research shows that people with similar earnings and household circumstances can receive very different levels of help with council tax depending purely on where they live.

"Sharp cut-off points in support as income rises can also mean some people are worse off after starting a job or working longer hours. This can undermine work incentives and raises questions about consistency and fairness in how help with council tax is provided to low earners.”

Dr Marsha Wood, a Research Associate in the IPR and co-author of the research, adds: “For some working households, higher earnings do not necessarily translate into better financial outcomes if council tax support reduces as a consequence. This highlights the importance of looking at how different parts of the system interact.”

The report outlines several options for reform, including introducing reintroducing a nationally designed system, administered by local authorities, or integrating council tax support within Universal Credit.

The findings are based on research conducted between May and October 2025, including a survey of 160 Universal Credit claimants in work, follow-up interviews with 30 participants, and discussions with local authorities and advice organisations.

Independent Age Chief Executive Joanna Elson, CBE said: “Older people on low incomes are having their budgets stretched to breaking point, and rising Council Tax is pushing far too many pensioners deeper into financial hardship.

“Our research shows that lack of CTR take up is keeping a shocking 74,000 older households in poverty. It’s not right that people in later life are cutting back on essentials such as food and heating so they can cover their Council Tax bill when this help is available to them.