Council Tax Reduction: how help with your bill works
Published · 6 min read · Figures checked . UK rules and rates change, so check the official sources below before you act.
Council Tax Reduction is a means-tested discount run by local councils for people on a low income. This guide explains who can get it, how entitlement is assessed, how England and Wales differ, and where to get free help.
What Council Tax Reduction is
Council Tax Reduction, which some councils call Council Tax Support, is a discount on your council tax bill that depends on your circumstances. It is not a cash payment: Citizens Advice explains that the council reduces the bill itself and then tells you what is left to pay. GOV.UK says you could be eligible if you are on a low income or claim benefits, and that the bill could be reduced by up to 100%. You can apply whether you own your home, rent, are working or are unemployed. It is separate from council tax discounts and exemptions, such as the 25% discount when only one adult lives in a home, which depend on who lives there rather than on income and savings.
How entitlement is worked out
GOV.UK says the amount depends on your household income, which includes savings, pensions and a partner's income, and on other things: the number of children and whether they live with you, whether other adults live with you, any benefits you receive, and your residency status. Gov.wales lists the same kind of factors for Wales: weekly income, capital such as savings, who lives with you and whether you are of working age or a pensioner. In both countries the council compares household income with an amount the rules treat as needed to live on, and the further income sits above that amount, the smaller the reduction. Adults aged 18 or over who live with you may be expected to contribute to household bills, which can lower the reduction. Citizens Advice says this does not apply if the other adult is your partner or is also liable for the bill.
England: local schemes for working-age people
In England, GOV.UK says each council runs its own scheme, so what you receive depends on where you live. Citizens Advice explains that working-age rules are set by the council, and that you will likely have to pay something towards your bill. The same working-age rules also apply to someone who has reached State Pension age if they or their partner get Universal Credit, income-based Jobseeker's Allowance, income-related Employment and Support Allowance or Income Support. Pension-age rules, set nationally, apply to people who have reached State Pension age and are not on those benefits. As an illustration of local variation, one council's 2026 to 2027 scheme caps working-age support at 80% of the bill, with awards of 80%, 65%, 40%, 20% or nothing depending on how far income exceeds the applicable amount. Other councils use different percentages and bands, so that example should not be read as typical.
Wales: a national scheme
Gov.wales describes the Council Tax Reduction Scheme as a national scheme delivered by local authorities, and says the Welsh Government provides £244m a year for it through the local government settlement. For 2025-26, its written statement of 14 August 2026 reports that over 257,000 households, around one in five, received a reduction, and over 218,000 of them paid no council tax at all. The gov.wales page on reductions says you can apply on a range of benefits or none, in or out of work, as a carer or when retired. People are not eligible with capital of £16,000 or more if under 65, or if 65 or over unless they or their partner receive the Guarantee Credit part of Pension Credit. Applications go to your local council's council tax department.
Savings, property and other limits
Capital means savings and property other than your home. Under the English pension-age rules, Citizens Advice says capital must be under £16,000, although you can still get a reduction above that if you receive the guarantee part of Pension Credit. Jointly owned capital is usually treated as owned in half, so a joint account holding £16,000 shared with a son or daughter counts as £8,000, but the full amount counts if you share it with a partner. Working-age schemes in England may have different capital rules, and the page read for this guide did not state them, so the council's own scheme document is the place to check. You also need to be habitually resident in the UK, Ireland, the Channel Islands or the Isle of Man, and non-British citizens can only claim if their immigration status allows access to public funds.
A worked example
The figures below are illustrative and not tied to any real council. For example, suppose a working-age household has an annual council tax bill of £1,800 and lives under a scheme with a maximum award of 80%. At the maximum, the reduction is 80% of £1,800, which is £1,440, leaving £360 to pay. If the household's income were high enough to fall into a band that gives 65%, the reduction would be 65% of £1,800, which is £1,170, leaving £630. Comparing the two cases, the difference in the amount payable is £630 minus £360, which is £270. Every council sets its own bands, so the figures depend entirely on the local scheme.
Other points to know
- Northern Ireland has a different system based on rates, so Council Tax Reduction does not apply there. GOV.UK links to nidirect for help with rates.
- Scotland has its own separate guidance, which this guide does not cover in detail. Scottish readers can check the Scottish Government's mygov.scot pages or their council.
- If a council refuses a discretionary reduction on grounds of severe hardship, Citizens Advice says you may be able to appeal to a valuation tribunal.
- If you are unhappy with how a claim was handled, you can use the council's complaints process first and then, in England, the Local Government Ombudsman.
Where to get free help
If council tax is hard to pay, many people find it useful to contact the council early, as gov.wales advises. In Wales, AdviceLink Cymru offers free advice on 0800 702 2020. Citizens Advice and MoneyHelper also provide free, impartial guidance. Citizens Advice notes that a discretionary reduction may be possible in severe hardship even where a person's immigration status does not allow access to public funds. This guide is general information, not personal advice, and it cannot say what any particular household would receive.
Check before you act
Local schemes, limits and bills change, and the Citizens Advice page used here was last reviewed in August 2021, so it can be worth confirming details on the official pages and your own council's scheme before relying on any figure.
Sources
For information only. See our disclaimer and editorial standards. Spotted an error? Tell us.
