Money and Mental Health welcomes council tax consultation - Money and Mental Health Policy Institute

IMMEDIATE RELEASE

Money and Mental Health welcomes new government consultation on making council tax collection fairer

20 June 2025

Martin Lewis (MoneySavingExpert) and the Money and Mental Health Policy Institute and MoneySavingExpert have welcomed a new government consultation on making council tax collection fairer for people in debt.

Research by Money and Mental Health shows that the aggressive way that councils rapidly escalate collection and extra charges for people who miss a council tax payment causes grave distress, and can even contribute to people becoming suicidal.

The charity and Martin Lewis have been calling on the government to change national regulations, so that councils have to give people more time between missing a payment and facing more aggressive forms of debt collection; and to cap the extra charges councils levy on people when they miss a payment.

In response, the government’s consultation sets out plans to act on both those issues, by making the following changes in England (the Welsh government is already consulting on similar changes):

Extending the time period between someone missing a council tax payment, and their council demanding that they pay their full annual council tax bill. This is currently just three weeks — the government is consulting on extending this, with a range of options, including 90 days (commercial creditors have to wait 90-180 days before demanding full repayment of a debt).
Capping the extra charges which councils levy when they issue people a ‘liability order’. This a letter that lets them take much more aggressive forms of debt collection including sending in bailiffs. Liability orders cost the Ministry of Justice only 50p to produce, but local authorities are charging people as much as £150 when they are issued this letter. The government is consulting on capping this at a range of different levels, including “less than £70” (in Wales this is already capped at £70).

Responding to the government’s proposals, Martin Lewis, Founder and Chair of the Money and Mental Health Policy Institute, said:

“Many parts of the Council Tax system are broken, and having called for some of these fixes for nearly 20 years, I’m delighted the government has listened and rapidly launched this long-due consultation, including many of the administration areas I hear the most complaints on.

“Council Tax rapid and aggressive debt collection methods currently hurt millions and disproportionately affect those with mental health problems. Within three weeks of missing a monthly payment many councils say you must pay for the whole year… ridiculous, how can people who can’t afford to pay for a month, suddenly pay for a year? After a further three weeks councils can call bailiffs in and rack up charges on charges. No commercial lender is allowed to behave like this, meaning constituents are treated worse than consumers. Worse, it’s counter-productive, can add to council’s costs and still doesn’t mean people can pay it back. The government has listened to our evidence, and this consultation thankfully looks at slowing it down, adding-in consideration, capping added costs, and pointing people towards help to pay.”

ENDS

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Notes to Editors

The Money and Mental Health Policy Institute was set up by Martin Lewis in spring 2016, registered charity number 1166493.
It conducts research and develops policies for essential services firms, regulators, the health service and government to help people with mental health problems protect themselves from financial difficulties and get out of debt.
Martin Lewis OBE, Money Saving Expert, is an award-winning campaigning broadcaster, newspaper columnist and author. He founded MoneySavingExpert.com in 2003 for £100 and remains its full-time Editor-in-Chief. It is now the UK’s biggest money site, with more than 14 million monthly users. Martin has his own prime-time ITV programme – The Martin Lewis Money Show – and is resident expert on This Morning, Good Morning Britain and BBC Radio 5 Live’s Consumer Panel, among others.
Helen Undy is a passionate mental health campaigner and became the Institute’s Director in 2018, having previously led the Institute’s impact and communications work.