Council tax hikes: How state pensioners may get reductions on rising bills – check now

Martin Lewis discusses state pension underpayments

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Council tax bills may rise for many over the coming months as it was recently detailed that councils across the UK are dealing with “budgetary black holes” in the face of coronavirus. UK households now face an average 4.3 percent council tax increase for the current tax year.

Salman Haqqi, a personal finance expert at, reflected on how difficult this will be for households to manage in early June.

He said: “Receiving the news that extra cash will need budgeting for over the next 12 months is never a good thing.

“But after the events of the past year, these council tax hikes are just another additional pressure for those already struggling to stay financially afloat.”

Fortunately, retirees on low incomes may be offered some levels of restbite from these hikes through state support.

State pensioners on low incomes may be eligible for pension credit, which is a state benefit that tops up retirement income.

To be eligible for pension credit, a claimants weekly income must not be above £177.10 if they’re single, or £270.30 for partners.

Should claimants be eligible for pension credit, they’ll have their income topped up to these levels.

On top of this, additional payments can be awarded to those who have a severe disability, care for another adult or are responsible for children or young people.

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Additionally, extra amounts could be awarded to cover housing costs such as:

  • Ground rent if the claimant’s property is a leasehold
  • Some service charges
  • Charges for tents and site rents

Claimants may also be eligible for council tax reductions, which could reduce bills by up to 100 percent.

Applications for council tax reductions must be made through local councils themselves.

These reductions can be applied for by those who own their own home, rent, are unemployed or working.

The reduction a person gets will depend on:

  • Where one lives – each council runs its own scheme
  • The claimant’s circumstances (eg income, number of children, benefits, residency status)
  • Their household income – this includes savings, pensions and their partner’s income
  • If their children lives with them
  • If other adults live with them

Claims for pension credit itself can be started up to four months before a person reaches their state pension age.

Applications can be made online, over the phone or through the post.

Claims can also be made at any time after a person reaches their state pension age but applications can only be backdated by up to three months.

This means some claimants may get up to three months worth of pension credit in their initial payment.

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