Millions of households struggling with council tax arrears could soon get relief after a major rule change backed by Martin Lewis.
The government has confirmed plans to end “aggressive” debt collection tactics, giving people far longer to catch up on missed payments and capping extra charges.
Under current rules, councils can demand the full year’s council tax just weeks after a single missed payment, often leading to court action and extra fees.
But new proposals will:
- Give households 63 days (around two months) to catch up
- Cap admin and enforcement fees at £100
- Allow bills to be spread over 12 months instead of 10
The changes aim to ease pressure on families already dealing with rising living costs.
‘Most vicious’ debt collection system
Reacting to the changes, Martin Lewis did not hold back.
He said: “Council tax debt collection is so aggressive it’d make banks blush.
“It’s the most vicious and damaging form of legal debt collection out there – causing counterproductive misery for millions.”
He added that after campaigning on the issue for 18 months, the reform is a major step forward.
“I’m genuinely moved by this huge first step towards making things better,” he said.
Why households were struggling with council tax rules
Under the old system, missing just one payment could quickly spiral:
Full annual bill demanded within weeks
- Extra charges added
- Risk of court action or bailiffs
Campaigners have long argued this approach made debts worse rather than helping people repay them.
Steve Reed said the changes are designed to stop families being pushed into crisis.
“Too many families are facing aggressive enforcement action, with people left terrified of bailiffs knocking on the door because one month’s council tax bill was missed,” he said.
“We will stop this and make the system fairer.”
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The reforms mark the biggest change to council tax collection in decades, potentially helping millions avoid spiralling debt.
While Martin Lewis said there is still room for improvement, he made clear this is a significant breakthrough.
“In a perfect world, it would be even longer,” he said, “but this is still a hugely welcome change.”
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