Households face council tax hikes of up to 9.99% – how much more will you pay this year?

Most local authorities will hike council tax bills by the maximum amount possible this year, with some councils being given special permission to exceed the government’s cap.

Local authorities with social care responsibilities are allowed to raise bills by up to 4.99% per year without triggering a referendum, while those without social care responsibilities can hike by 2.99%. Bills go up each year on 1 April.

This year, almost 80% of councils are raising bills by the maximum amount. It means the average Band D bill will rise by £109 to £2,280 per year.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Band D is the standard measure of council tax, with all other bands being set as a proportion of this band. You may find that you pay more or less than this depending on which band your home falls into, and how much council tax your local authority charges.

Six local authorities have been given special permission to hike bills by more than the 4.99% cap – part of an effort to avoid bankruptcy. The biggest hike in percentage terms will come in Bradford, where the average Band D resident will find themselves paying around £170 more.

A record number of councils asked for permission to hike bills above the 4.99% limit this year. Deputy prime minister Angela Rayner said that the government had only agreed to a “limited number of requests” to prevent councils from “falling further into financial distress”.

Rayner added that, in all cases, the government had not granted the full amount requested by the councils. That’s unlikely to offer much comfort to struggling households, with council tax bills having risen considerably in recent years.

Research from the Resolution Foundation, an independent think-tank, found that the poorest fifth of households were spending 4.8% of their gross household income on council tax at the start of this decade. That’s up from 2.9% in the early 2000s.

“Council tax is consuming a larger share of poor families’ household budgets, who are spending almost as much on these bills as they pay in income tax,” said Lalitha Try, economist at the think-tank.

Energy bills are also set to rise this April by an average of £111 a year, in line with the April price cap. Water bills will go up by an average of £123.

Which councils are increasing bills the most?

These are the local authorities which are hiking bills by more than the cap:

• Bradford: 9.99%
• Newham: 8.99%
• Windsor & Maidenhead: 8.99%
• Birmingham: 7.49%
• Somerset: 7.49%
• Trafford: 7.49%

As mentioned above, the majority of taxpayers in other local authorities will see their bills rise by 4.99%.

Government figures show that, of the 384 local authorities that are subject to referendum principles, 293 areas hiked bills by the maximum amount possible, while 56 were close to the maximum.

Only eight local authorities made no change or decreased their average Band D council tax.

In the capital, all but three local authorities voted to raise bills by 4.99%. Barnet was one of the exceptions but fell closely behind with a 4.98% hike. Meanwhile, Kensington and Chelsea voted to raise bills by 4%. Wandsworth, known for having the cheapest council tax in the country, will raise bills by just 2% – which is lower than inflation.

Further information about hikes in your area can be found on your local authority website.

How can I save on my council tax bill?

You may be able to make a large saving by checking your council tax band. If you aren’t in the correct bracket, your council tax could be reduced and you might even be due a large refund.

Some people are also eligible for a discount or reduction in their council tax bill based on their personal circumstances. For example, those who live alone are entitled to a 25% discount. There are also discounts for people with certain disabilities. Similarly, households where everyone is a full-time student don’t have to pay any council tax at all.

If you are on a low income or live with someone who is, you could also qualify for a council tax reduction. The exact criteria vary from council to council.

Ultimately, the best way to work out what you are eligible for is to track down your local council website. If you can't find the information you need there, it is worth getting in touch with the council directly.

Finally, it is worth pointing out that some of the rules have changed in recent years. For example, second homes used to qualify for a discount on council tax bills, however laws which came into force in early 2024 mean local authorities can now charge a council tax premium of up to 100% on second homes. The new rules are part of a bid to increase the availability of housing stock.