Debt advice charity Money Advice Trust has published a new report, ‘Lost in the system‘, which they say shows how outdated council tax debt collection practices are, ahead of further bill rises across England set for April 2026. It warns that thousands of people are already being pushed into hunger, stress and spiralling debt by an outdated collection system.
Current rules mean that people can be hit with their entire annual council tax bill after missing just one payment — turning a small shortfall of £100 or £200 into a demand for more than £1,000 within weeks.
Key findings:
One in four people Money Advice Trust’s National Debtline helps have council tax debt, owing just over £2000 on average. People whose council demanded they pay the full bill after falling behind said they had to take drastic measures to try and make the payments their council wanted.
- Three quarters (74%) fell behind on other essential bills
- Half (54%) went without food
- Two in five (41%) borrowed money to pay
- Three in five (57%) said it had a negative impact on their mental health and half (54%) said it negatively affected their children
- Two in five (39%) were scared they would be sent to prison if they didn’t pay.
The charity’s research also showed certain groups were much more likely to be behind: People receiving Universal Credit were five times more likely to have missed a payment in the last year, while disabled people were three times more likely to. It say that the current rules encourage councils to quickly move to use extreme measures to collect what’s owed, including turning to bailiffs. Councils in England passed 1.69 million debts to bailiffs in 2024/25, a 14% rise on the previous year.
Steve Vaid, Chief Executive, Money Advice Trust, says:
“The way council tax debt is collected is not only outdated, but actively pushing people further into hardship. Facing demands to pay the entire year’s bill after just one missed payment is a severe rule that doesn’t match the financial reality of lower‑income households. It leaves people facing an impossible situation – missing meals, cutting back on energy and falling further behind on other essential bills.
“The Government must now act by changing the rules on how council tax debts are collected and putting more funding into reducing bills for struggling households, particularly when bills are set to rise for millions of people in April.
“Councils are under immense pressure too – but escalating debts in this way doesn’t help anyone. A fairer, more supportive system is both possible and urgently needed.”
David, who was supported by National Debtline, struggled to get help from his council to deal with council tax debts, which ended up totalling around £6,000. Despite working full-time , several events in his personal life, including splitting up with his partner and becoming a single parent to his daughter and the death of his father, made keeping up with essential costs tough. He said:
“I felt that the council had zero sympathy when I was unable to keep up with payments according to their schedule. They didn’t seem to take any account of my situation, and sent bailiffs round several times, which had a big impact on my mental health.
“The bailiffs were very unhelpful, continuing with threatening behaviour despite my pleas for them to be discreet in front of my daughter, who is a vulnerable person.
“I found myself relying on foodbanks due to a lack of support available from the council.
“I found the whole situation incredibly stressful and wish the council had done more to help me repay affordably over time. After getting advice from National Debtline, I went into a Debt Relief Order to help clear the debt, something I don’t think I would have had to do if it weren’t for the situation I faced with the council.”
National Debtline is calling for central and local government to modernise the way council it is collected, to better reflect the pressure struggling households are under. It wants a change to the rules to give people at least 90 days’ before councils attempt to recover the full year’s bill after missed payments — and scrap the threat of prison for council tax debt in England. It also wants proper funding so councils can offer full support to those who need it.
Locally, the charity says councils should stop sending the debts of struggling households to bailiffs, make support easier to get, and let people pay back what they owe at a pace they can manage. It’s also calling for stronger rules so bailiffs are properly held to account.