Council tax arrears in England have reached £7.4 billion, with the amount owed to local authorities rising by £782 million in a year, according to figures highlighted by the Centre for Social Justice (CSJ). The outstanding debt increased by 11.8% during the 2025/26 financial year, equivalent to almost £1,500 accumulating every minute.
Warning over collection methods
The CSJ has warned that the way councils pursue unpaid bills risks pushing financially stretched households further into debt. Ben Gregg, the think tank's head of welfare, said the Government could take practical steps to prevent arrears from spiralling.
"Council tax arrears are dragging struggling households deeper into problem debt. Yet the way this debt is collected is firmly within the Government's control," he said. Mr Gregg added that people often fail to respond to demands because they do not understand the correspondence, put off dealing with it, or do not know where to find trustworthy advice.
"Clearer communications, earlier support and a trusted route to free advice are everyday fixes that could make a real difference. Ministers should build them into the council tax reforms already underway," he said.
Rising bills and regional variations
The warning comes as council tax bills continue to rise. The average Band D charge in England increased by £111 to £2,392 in April, a rise of 4.9%. Some households have faced steeper increases, with Worcestershire County Council raising its share of the Band D bill by 8.98% and Trafford imposing a rise of 7.49%.
The £7.4 billion figure represents the accumulated amount owed, including arrears from previous years, rather than just unpaid bills from 2025/26.
Debt advice and report findings
The CSJ's forthcoming report, Money Mindsets, produced with credit management company Lowell and debt advice provider Money Wellness, examines why people struggle with debt and what prevents them from seeking help. It found that more than half of people who need debt advice do not know who to trust for financial help and support.
Adam Rolfe, policy and public affairs officer at Money Wellness, said council tax arrears featured in more than a third of the cases handled by the organisation. "People fall behind because they can't keep up with the cost of living, and under the current rules, missing one payment can mean being asked for the whole year's bill within weeks, which only pushes them further into debt," he said.
Mr Rolfe urged councils to use their existing discretion to help residents who fall behind, rather than waiting for further changes to the system. "They already have the discretion to give people more time and to point them towards free, trusted debt advice at the first missed payment, and we'd urge them to use it now," he said.
Government reforms
The CSJ is calling for clearer reminder letters, digital communications alongside traditional post, and better signposting to free debt advice.
The Government's reforms, due to begin in April 2027, will give households at least 63 days after missing a payment before losing the right to pay in instalments. Councils will have to issue a reminder and a final notice, giving residents more time to catch up before the full outstanding bill becomes due. From April 2028, council tax will also be spread over 12 months by default, reducing monthly payments.
