Council tax arrears are growing at a rate of £1,500 every minute, according to a new analysis warning that households are sinking deeper into debt. The Centre for Social Justice (CSJ) found that arrears rose by £782 million in 2025-26, reaching £7.4 billion.
The findings come as families across the country face another increase in their bills. The average Band D council tax in England rose by £111 to £2,392 in April, a jump of 4.9%. The CSJ highlighted an 8.98% increase by Worcestershire County Council.
Debt advice and trust concerns
The think tank warned that more than half of people in need of debt advice say they "don't know who to trust for financial help and support." It wants councils to act to help households before debts escalate. The Local Government Association said it is "vital" that anyone unable to afford payments contacts their council.
Shadow housing minister Gareth Bacon responded to the findings, saying: "Council tax is spiralling out of control under Labour, with families facing ever-rising bills. It is little wonder that more and more people are struggling to pay. Hardworking people are dealing with rising prices, rising energy bills and rising costs at the pump, yet all Labour can offer is tax, tax, tax. They are hiking up ordinary people's council tax and adding extra costs on top through their new family homes tax."
Call for clearer communications
Ben Gregg, head of welfare at the CSJ, said: "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. Too often, opportunities to help people avoid a debt spiral are missed because people do not understand what they have been sent, put off responding, or simply do not know who to trust. Clearer communications, earlier support and a trusted route to free advice are everyday fixes that could make a real difference."
The report is produced in partnership with credit management company Lowell and Money Wellness, which offers debt advice. Lowell found that nearly half of households had no emergency savings, meaning many have little protection against further increases in essential bills.
Industry and government response
Lowell chief executive John Pears said: "Council tax debt is one of our biggest concerns… Bills keep rising, and more and more people cannot afford it. Instead, they are left in serious debt at the mercy of a system that just does not work. Our customers have been telling us for years that many councils rely on legal threats and aggressive enforcement and they don't know where to turn for help."
He added: "The Government and councils need to recognise that a better approach helps them and it helps people in debt. We can't afford to miss this opportunity to reform council tax for the better."
Councils will be required to issue both a reminder and a final notice before households lose the right to pay in instalments, and the time before the full annual bill can be demanded is being extended.
A spokesperson for the Local Government Association said: "Many councils have faced having to increase council tax bills to try and protect services from further cutbacks at a time when they are acutely aware of the financial pressures facing households. Councils provide a range of support to people who are struggling to meet their council tax payments. It is vital that anyone who is unable to afford their bills, or who is at risk of financial hardship, contacts their council as soon as possible to access help and agree an affordable repayment plan."
A spokesperson for the Ministry of Housing, Communities and Local Government said: "We're making council tax bills more manageable by moving to 12 monthly payments by default and capping the costs councils can charge for recovering overdue bills at £100. People struggling with council tax should be able to get the right help before they fall further into debt. That's why our reforms will require councils to signpost people to trusted advice and support."
