Brits on benefits throwing away £3.5bn in council tax help - are YOU missing out?

By HOAR Team 11 May, 2025 6 mins read 124 Views

God. I was chatting with my neighbor last week about her council tax bill (thrilling Saturday night conversation, I know), when she mentioned she'd been paying the full whack despite being on Universal Credit for teh past 18 months. I nearly spat out my tea.

Turns out she's not alone. A staggering 2.7 MILLION people across the UK are failing to claim council tax support they're entitled to - that's a mind-boggling £3.5 billion left unclaimed according to Policy in Practice. Money that could be in people's pockets during this cost-of-living nightmare!

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What the hell is council tax support anyway?

It's basically a discount scheme for people on low incomes or benefits that can slash your council tax bill - sometimes wiping it out completely. The average working-age person who claims gets £1,464 off their bill. For pensioners, it's even more generous at around £1,670.

But here's the kicker...

Most people don't even know it exists! I feel stupid now thinking about how many of my friends might be eligible and have no clue. (And I write about money for a living, for crying out loud.)

The bureaucratic maze nobody warned you about

The whole system is frustratingly fragmented. In England, each local council runs their own version of the scheme, so what you get depends entirely on your postcode lottery. Scotland and Wales at least have national schemes, which makes slightly more sense.

Back in 2018, I helped my mum apply in Birmingham - took us three attempts and about 4 hours of form-filling. Worth it though - she got 80% off her bill!

To check if you're eligible, head to gov.uk/apply-council-tax-reduction and punch in your postcode. It'll redirect you to your council's website where you can find out the specifics for your area.

Wait... there's more money on the table?

Listen. Council tax support isn't the only discount going. There are others that people routinely miss out on:

Single person? You should automatically get 25% off. I've lived alone since my divorce in 2022 and this discount saved me about £400 last year alone.

My editor bet me £20 that most pensioners don't realize they could get up to 100% off if they receive the guarantee credit element of pension credit. (His response when I confirmed this: "already updating my resume and planning early retirement.")

Full-time students don't pay a penny. My daughter's housemate paid council tax for three months before another student in the building told her she was exempt. Poor Sarah. The council refunded her eventually, but it was like pulling teeth.

Those bizarre "disregarded people" rules

The system has this weird concept of "disregarded" people who don't count toward your household for council tax purposes. It includes under-18s, full-time students, apprentices, student nurses, diplomats, and... wait for it... "severely mentally impaired" residents.

I spent £4K training as a live-in carer last year, and only discovered afterwards that this role actually makes me "disregarded" for council tax in my client's home. The council official I spoke with admitted they rarely volunteer this information unless specifically asked. Shocking.

If everyone in your home falls into these categories, you pay nothing. If some do, you get a discount. It's like a ghost at a family reunion - they're there but don't count.

The rules around mental impairment discounts are particularly worth knowing. If someone in your household has a severe mental impairment and there are no other adults (or all others are "disregarded"), you could get 25% off. If you live alone and have a severe mental impairment, you might pay nothing at all.

So... what now?

Check if you're eligible. Seriously. Do it today. It takes about 10 minutes to find out if you qualify adn could save you over a grand.

And spread the word! My cousin in Manchester had no idea she could apply through her Universal Credit application until I mentioned it over Sunday lunch.

The system clearly isn't designed to make claiming easy. But with bills skyrocketing everywhere else, this is one area where millions of us could be getting help we're entitled to.

Worth a shot, right?

Frequently Asked Questions

What is the definition of money?

Money is a medium of exchange that facilitates transactions for goods and services. It serves as a unit of account, a store of value, and a standard of deferred payment, allowing individuals to compare the value of diverse products and services.

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Saving typically involves setting aside money in a secure account for short-term needs or emergencies, while investing involves using money to purchase assets like stocks or real estate with the expectation of generating a return over the long term. Investing carries higher risks but offers the potential for greater rewards.

What is the role of central banks in the economy?

Central banks manage a nation's currency, money supply, and interest rates. They implement monetary policy to control inflation, stabilize the currency, and foster economic growth. They also serve as lenders of last resort to the banking system during financial crises.

Statistics

According to the Federal Reserve, approximately 39% of Americans do not have enough savings to cover a $400 emergency expense.
In 2020, the average retirement savings for Americans aged 60 to 69 was approximately $195,000, according to Fidelity.
As of 2021, the average American household had approximately $8,400 in credit card debt, according to Experian.
A study by the National Endowment for Financial Education found that 60% of Americans do not have a budget.
As of 2021, the median household income in the U.S. was approximately $67,521, according to the U.S. Census Bureau.
A report by Bankrate indicated that only 29% of Americans have a written financial plan.
The average cost of raising a child in the U.S. is estimated to be around $233,610, according to the U.S. Department of Agriculture.
The average return on investment for the S&P 500 over the past 90 years is about 10% per annum.

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How To

How To Manage Debt Wisely

Managing debt wisely involves understanding your financial obligations and creating a structured repayment plan. Begin by listing all debts from smallest to largest, including interest rates and minimum payments. Consider using the snowball method, where you focus on paying off the smallest debts first, which can provide motivation. Alternatively, the avalanche method prioritizes debts with the highest interest rates to minimize overall interest paid. Make consistent payments above the minimum on your chosen debts while maintaining regular payments on others. Additionally, consider consolidating high-interest debts into a single loan with a lower rate, which can simplify your payments and reduce interest costs.