Households receiving means-tested benefits from the Department for Work and Pensions (DWP) are being alerted to potential major savings on council tax payments. Experts reveal that over 2.25 million people on lower incomes are missing out on council tax support, which could reduce their bills to zero.
How Council Tax Reduction Works
Council Tax Reduction schemes are run by local councils and are designed to help low-income households with their council tax bills. However, a key issue is that residents must apply separately for this discount; it does not happen automatically when claiming benefits.
This support is available for people claiming Universal Credit, Pension Credit, and other means-tested benefits. Depending on individual circumstances, some households could see their payments cut completely, meaning they will not have to pay anything at all.
Expert Advice from Money Saving Expert
Money Saving Expert (MSE) explained: "Every council runs its own Council Tax Reduction scheme. So what you get depends on where you live, but it can cut your council tax bill by up to 100%... though it's a jungle of variation, so it really depends on each council."
MSE added: "Who's likely to get it? If you already qualify for a means-tested benefit, such as Universal Credit or Pension Credit, you may be due this. The most important thing to understand is you won't get it automatically - YOU MUST APPLY SEPARATELY, which is why so many miss out."
Millions Missing Out
In 2024, an investigation by MSE found that local authorities across Britain were sitting on £140 million of overpaid Council Tax. The expert also noted that people are most likely to be able to claim if they have moved out of a council area since 1993 and were not paying by direct debit.
To apply, residents should contact their local council directly. The process can vary by area, but the potential savings are significant, especially for those on low incomes.
