Council tax rise another blow to those facing ‘seemingly never-ending’ cost of living pressures

^{24 March 2026}

Council tax bills across England and Wales are expected to rise by an average of 5% tomorrow, as local authority finances are further stretched across the board. StepChange, a leading debt advice charity, says this will exacerbate existing cost of living pressures as household budgets are forced to stretch further.

StepChange is warning that tomorrow’s expected rise in council tax rates will lead to increased arrears and with that a potential uptick in heavy-handed enforcement action, as StepChange insight shows the depth of the council tax affordability crisis and the impact of council tax enforcement:

• Average council tax arrears among StepChange clients have risen by 86% when compared to the pre-pandemic period, up from £1,146 in 2019, now at an average of £2,137 for 2025. This is more than three times the rate of inflation over the same period, meaning StepChange client council tax debts have grown by nearly £1,000 in real terms since 2019.
• Looking through the keyhole found that clients surveyed who faced bailiff action overwhelmingly reported a resulting negative impact to their physical (91%) and mental (95%) health, with half (53%) saying bailiffs put pressure on them to agree to unaffordable repayment plans.
• Clear, Fair and Understandable highlighted the impact of council tax communication and enforcement, as 1 in 20 (5%) councils mention prison in their first letter to those in arrears, with over 1,500 cases of prison instigations since 2020, despite just 4 sentences. What’s more, over 1 in 3 (36%) of first reminder letters mention enforcement or recovery.

With wider cost of living pressures from the shock of the Iran war beginning to filter through slowly, StepChange is expecting a rise in the cost of essentials across the board, as the price of fuel, food, and energy is likely to fluctuate significantly. This comes at a time when the average client has just £89 remaining in their budget after essential costs have been factored in, all of which largely mirrors the experience of their client base at the time of the Ukraine war.

Peter Tutton, Director of Policy, Research and Public Affairs at StepChange:

“Our clients know full well how quickly council tax debt can spiral. A single missed payment is too often met with demands to pay a full year’s bill and often escalated through to enforcement action, which can bring extra fees, stress, and bailiffs at your door. Rather than supporting people with their situation, some councils currently make it harder for people to get back on track.

“But the reality is so many of our clients in council tax arrears are behind on other bills, leading to what feels like a seemingly never-ending cycle of bill rises. News of a near maximum rise in council tax will pile further pressure on households already struggling to keep up with essential costs across housing, energy, and food. For many on tight budgets, even relatively small increases in council tax can be enough to push them into arrears, and with that facing down the barrel of rapidly escalating enforcement action.

“That’s why it’s so crucial that the Government moves quickly to introduce a fairer council tax collections system, one which scraps regulations requiring people to pay their full bill after one missed instalment and ends the final sanction of prison for non-payment in England. This is an important step towards placing compassion at the heart of the process and giving their residents proper room to repay.”

Notes to Editors

1. The official council tax rise will be announced by the Ministry of Housing, Communities, and Local Government, here at 9:30am on Wednesday the 25th March. This breaks down the average rise across the board and illustrates the average rise of a typical Band D property per year.
2. * The Scottish and Welsh Governments have removed the regulation around imprisonment for council tax non-payment.
3. StepChange’s 2024 report, Looking through the keyhole analysed client experience of council tax collection and made a range of recommendations to Government. It drew on quantitative data in the form of polling and client financials, and qualitative data with surveys and interviews. It can be viewed here.
4. Stats around the impact of bailiffs are based on a subsample of StepChange client survey respondents who experienced enforcement action. Total answering this survey question: 127
5. StepChange’s client data for 2025 can be viewed here.
6. Clear, Fair and Understandable? draws on a Freedom of Information request to every council in England and Wales, requesting their first, second and final template letter to those in council tax arrears, and also how many cases of imprisonment proceedings councils in England have instigated. The acceptance rate for the request was four in five councils (78%). The full report can be viewed here.