Council tax debt hits record high - but could a policy change be coming?

Council tax debt has reached a record high in England, government data shows.

A total of £7.4bn is owed in council tax, an increase of 11.3% on last year's figure of £6.6bn.

Almost six million people are worried about affording their monthly payments, debt charity StepChange found.

"With one in three of those coming to StepChange behind on this bill, these latest figures are no surprise to us and point to a system that perpetuates debt with little to no constructive route out," Vikki Brownridge, its chief executive, said.

Could change be coming?

Under existing government plans, households will be given more time to pay overdue council tax bills.

At the moment, councils can demand payment for the entire year just two weeks after people miss one monthly payment, leaving people facing extra costs and being taken to court.

Under the proposals, households will have 63 days to settle up, and any admin costs will be capped at £100.

The government will also change council tax billing from 10 months to 12 months by default, which could help households to spread the cost of their payments over a longer period.

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New PM...

The likely next prime minister, Andy Burnham, has long been an advocate of council tax reform.

During his recent campaign, the 56-year-old called it "highly regressive" and said its 1991-based valuations were "not justifiable".

Burnham is listed as a supporter of a proposal put forward by the campaign group Fairer Share, which wants to replace council tax and stamp duty with an annual property tax that's equivalent to 0.48% of a home's value.

If this were to go ahead, it would mean property tax of £1,440 would be payable on a house valued at £300,000.

Martin Rayner, financial adviser at Compton Financial Services, told Money: "The council tax debate is particularly worrying. Council tax was designed to fund local services, with bands based on relative property values within a local area.

"It was never intended to mean that two homes worth the same amount in different parts of the country should automatically pay the same tax."

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Are you eligible for a council tax discount?

You may qualify for extra support or a reduction in your council tax bill, for example, if you're on a low income, a student, living alone or are disabled.

Another option is to have your council tax bill spread over 12 months instead of the usual 10 - this won't save you money but could help you to budget, if your council offers this option.

You could also get your home's council tax band reviewed, which may entitle you to a refund if you're in the wrong band. However, you should be aware that the review could lead to your property being put into a higher band.

(c) Sky News 2026: Council tax debt hits record high - but could a policy change be coming?