Unpaid council tax in England rises to £7.4bn as collection rules change from April 2027
Arrears grew by £782m in the last financial year, close to £1,500 a minute, and new rules will give households more warning before they lose the right to pay in instalments.
By Daily Oracles News Team2 min read
Households in England owed £7.4bn in unpaid council tax at the end of March, and the total is growing by close to £1,500 a minute, according to analysis published on Sunday by the Centre for Social Justice.
The think tank's figures are based on the government's own collection statistics. These show that arrears rose by £782m during the 2025 to 2026 financial year. The total is cumulative, so it includes debts that stretch back over several years, not just bills missed last year. Spread across the year, the increase works out at about £1,488 a minute.
Bills are still rising
Councils collected £43.9bn in council tax last year, up 6.4%. Of the bills due for that year, 95.6% had been paid by 31 March, a slightly lower share than a year earlier.
This April the average Band D bill in England went up by £111, or 4.9%, to £2,392. Most councils raised their share by the maximum allowed without a local referendum. The Centre for Social Justice pointed to rises of almost 9% in some areas, such as Worcestershire County Council's increase of 8.98% in its share of the bill.
The think tank's work is part of a forthcoming report, Money Mindsets, produced with the credit management company Lowell and the charity Money Wellness. It found that more than half of people who need debt advice do not know who to trust for financial help. Money Wellness said council tax arrears appear in more than a third of the cases it handles.
What changes in April 2027
One reason small debts can grow quickly is the way council tax is collected. Under the current rules, missing a single instalment can lead, within weeks, to a demand for the rest of the year's bill in one go.
That is being changed. Earlier this month the government confirmed that from April 2027 councils will have to send both a reminder and a final notice before a household loses the right to pay by instalments. A final notice cannot be issued earlier than 41 days after the first missed payment, and households will then have 21 days to bring the account up to date. The cost of a court liability order is also being capped at £100.
Billing is changing too. Newly liable households will be told from April 2027 that they can spread payments over 12 months rather than 10, and from April 2028 all households will move to 12-month billing by default unless they ask to keep 10.
Calls for clearer letters
The Centre for Social Justice wants these reforms to go further on how councils communicate. It is calling for reminder letters designed using behavioural research, more use of digital messages alongside paper, and information sheets that point people towards free debt advice through the government-backed MoneyHelper service.
Council tax bills for 2027 to 2028 will be set by councils next spring, after the government publishes its local government finance settlement for the year.
