Vulnerable households in England will soon have more breathing space to pay their council tax bills under sweeping reforms announced this week by the government.
The changes, revealed on April 15 2026 by the Ministry of Housing, Communities and Local Government, aim to modernise a system that ministers admit has remained largely unchanged since 1993.
Currently, missing a single monthly payment can trigger harsh consequences. Councils are legally allowed to demand payment for the entire outstanding balance within weeks, often piling on hefty administrative fees and, in some cases, involving bailiffs.
This approach, critics have long argued, traps struggling families in cycles of debt and stress.
More time for vulnerable people to pay their council tax bill after missing one month’s payment
From April next year, this process will change. People who fall behind will have 63 days which is roughly two months to bring their payments up to date, rather than becoming liable for the entire year’s bill after a few weeks.
Councils will also be required to work with residents on sustainable repayment plans, helping to prevent financial spirals.
Other council tax reforms include
12-month payment cycles by default, instead of the current 10, so households can spread the annual cost more evenly.
A £100 cap on administrative charges when councils seek liability orders — a step taken when bills go unpaid.
A review of the “Severely Mentally Impaired” council tax discount, with plans to update both the name and the definition to remove stigma and simplify access for those entitled to it.
Local Government Secretary Steve Reed said the shake-up was about “stopping aggressive enforcement” and restoring fairness.
“Too many families are facing terrifying enforcement action for missing just one month’s bill,” Reed said. “We will stop this and make the system fairer by supporting families who fall behind.”
Minister for Local Government Alison McGovern added that the current system had become “outdated and confusing,” preventing vulnerable people from getting the help they need.
The announcement follows a high-profile campaign by Martin Lewis, founder of MoneySavingExpert and the Money and Mental Health Policy Institute. Lewis has spent 18 months pressing for reform, calling the existing council tax debt recovery process “the most vicious and damaging form of legal debt collection out there.”
Welcoming the government’s response, Lewis described the changes as a “huge first step” towards a fairer system.
“In a perfect world, it would be longer than two months before full payment was demanded,” he said, “but this correction to a 33-year-old, grotesque process is a major victory for fairness and compassion.”
Wider local government reforms
The council tax overhaul forms part of a broader government programme to “fix the foundations” of local government.
Ministers have pledged the first multi-year financial settlement in a decade, giving councils long-term funding certainty and a 24.3% increase in Core Spending Power.
According to official figures, nine in ten councils will now receive allocations that better match local needs, up from just three in ten.
Officials have also confirmed that further consultations will explore support for apprentices and carers, as well as improvements to how council tax band challenges are handled.
Most reforms are expected to be implemented between 2027 and 2028, following engagement with councils and a new funding assessment to ensure local authorities can deliver the promised changes.
In the meantime, campaigners and charities are hailing the move as a long-overdue step toward a more compassionate approach — one that recognises the pressures ordinary households face and offers them time, rather than penalties, to get back on track.
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