Martin Lewis: I'm a bit teary – we just got a win on changing hideous Council Tax debt collection
Miss one monthly Council Tax payment and within six weeks you can have bailiffs at the door asking you to pay the whole year's bill, plus extra on top. But in a win for MoneySavingExpert.com founder Martin Lewis and his charity the Money and Mental Health Policy Institute (MMHPI), the Government has agreed to investigate these "catastrophic" debt collection practices.
The MMHPI launched its campaign in 2024 calling for action on the "outdated, outmoded and cruel" escalation that can happen when someone falls behind with their Council Tax payments.
But now, in an interview with Martin on ITV's Good Morning Britain (GMB) on Wednesday 14 May, senior cabinet minister Pat McFadden MP confirmed that the Government will consult on changing the rules, so that "there can be a reasonable period of time over which people can pay their debt".
Martin Lewis: 'Council Tax is the most vicious and aggressive form of debt collection – I hope this is the start of changing things'
Watch Martin's instant video reaction to the news after coming off air:
Martin: "I mean, I'm a bit teary, if I'm honest. In a good way, though, because I just had a win that I wasn't expecting. It's almost sort of – it feels slightly anticlimactic, but it's amazing.
"So I've just got off air, literally just off air after presenting Good Morning Britain. This is all about Council Tax debt collection, which is something, along with my charity, the Money and Mental Health Policy Institute, I've been campaigning on since last November [Martin meant September here]. Because it is the most vicious and aggressive and damaging form of debt collection that is out there.
"If you miss a monthly payment, within three weeks they will ask you for a year's payment, most councils. Then if you don't pay that – and how are you going to pay for a year if you can't afford to pay for the month? – two weeks later, they'll go to court.
"They'll get a liability order, which will normally add £150 on to your costs. And a week later they can have bailiffs in. Six weeks from missing one payment to bailiffs in for the entire year, plus additional costs.
"It is absolutely catastrophic and devastating for people's finances. No commercial company would be allowed to do the same because they have a consumer duty. That means they have a duty to, first of all, do what's in the best interest of consumers.
"And it would take probably six months to a year before they got in the same situation. And Council Tax, have constituents who don't have those rights. So this has been something I have... since we've been campaigning on it.
"And it was something that originally came from the research community of my charity, with all these people who've got mental health and money problems saying this is a bad one.
"So many people for whom Council Tax debt collection has been absolutely catastrophic, and the tipping point that has destroyed their finances because of the aggressive and rapid progression of how much debts they come in and we've been fighting it.
"And the main thing is to say: look, don't suddenly ask people for a year three weeks after they can't pay a month, try and signpost them for debt, help them so they can afford to pay.
"And we had the chancellor of the Duchy of Lancaster, which is a senior member of the cabinet, Pat McFadden, on the show, and I notified him yesterday that I wanted to talk about this, because what often happens when you've got politicians on it and if it's not their department they say, 'Sorry, I can't talk [about this] – I don't know.'
"So I said: 'I don't want you to be able to say, I don't know about this'. And I've had meetings with senior people in the Government on this before. And then at 8 [o'clock] we got a statement, a right of reply, and I was expecting the usual, 'Oh we'll try and do whatever...' And at the end it said: 'We will be launching a consultation'.
"And it was just… I was like, 'what?'. I mean, 'we're launching a consultation'. And then we had Pat McFadden on the show and he said, 'yeah,' he said, 'we're consulting'. I said, 'are you consulting?'. He said, 'we will launch a consultation this week'.
"What he then said is, 'because we yeah, absolutely we will look at this issue that we should not be suddenly allowing them to ask for a year's worth of payments when they've just missed a month, because how are people who can't pay a month going to be able to pay for a year?'.
"Sorry if I'm not being as lucid as I normally am. And, I just, I'm suddenly sitting there afterwards going, 'yes!'. I cannot tell you how many desperate people I have met whose lives have been absolutely ruined by this form of debt collection. We're hearing someone on the show who had bailiffs to their hospital bed.
"And, well, look, I mean, it's only a consultation, but I'm hoping that this is the start of changing things. This has... it's one of those things that people don't talk about but affects millions of people.
"And suddenly it's a campaign win out of nowhere. I'm very happy, slightly confused, trying to work out what work I need to do and a little bit emotional about it. So I thought I'd just record that feeling and try and explain it to you."
Read the full transcript
The Government will consult on changing the rules after pressure from Martin and his charity the MMHPI
In his interview with Mr McFadden on GMB, Martin said: "When a financial services firm, a credit card firm, even a payday lender has debt, they have a consumer duty. It means if they're collecting debt, they have to signpost them towards help, go through it gradually, and it would take six months to a year before they could throw bailiffs in. When it comes to council debt collection, it would make banks blush. It is so aggressive and so rapid."
Martin then asked Mr McFadden: "Do you think that's acceptable – that constituents are treated far worse than customers?"
The minister responded: "Well, we're consulting on changing it, is the truth. And it'll take care of this point of the system where, when somebody falls into arrears, they're expected to pay the whole amount.
"That's obviously very difficult for people. So we're consulting on changing that, so that there can be a reasonable period of time over which people can pay their debt."
'These are the first steps to making council tax debt collection fairer'
Responding to the news, Helen Undy, chief executive of the MMHPI, said: "We are absolutely delighted that the Government has listened to sense and is taking the first steps towards making council tax debt collection fairer. It's our second campaign win on this in a month, as the Welsh Government just launched a consultation on the same issue.
"We will be responding robustly to both, and hope to see people given more time to pay, and an end to the unreasonable charges being piled on top of already unmanageable debts. If the consultation delivers the change that’s needed, this really has the potential to transform lives."
The Government didn't provide further details on when the consultation would be published.
Missing just ONE Council Tax payment can be disastrous
Within three weeks of missing one Council Tax payment, councils can require residents to pay their full bill within just seven days. For the average UK household, this could mean a missed £140 payment results in a £1,668 bill just three weeks later.
Fail to pay your entire council tax bill within a week and your council can apply to take your case to court and ask for a 'liability order' – a letter that lets them take more aggressive forms of debt collection, such as sending in bailiffs. This makes council tax debt the most aggressive form of debt collection, says Martin.
The MMHPI has pointed out that these aggressive debt collection practices are damaging to people's mental health – particularly as people with mental health problems are twice as likely to be behind on Council Tax payments.
Responding to this point in his interview with Martin, Mr McFadden said: "Councils of course have a duty to try to collect the tax because they need that to keep services running. But when someone get into difficulty, I would hope that councils approach it with some sympathy. Because that's not been happening in some cases, we are now consulting on changing that."
If you're in England, you have the right to pay Council Tax monthly
Council Tax is charged annually – from April to April – but it often tends to be paid in 10 instalments from April to January. However, all English councils MUST allow you to pay over 12 months if you choose to.
Mr McFadden wants to make this the default: "We want to move more towards the standard 12 month payment period. That will be a wee bit less every month than dividing the bill by 10."
In the case where someone is in arrears, he said that "reasonable payment plans" should be put in place.
In Wales and Scotland, while paying over 10 months is also normally the default, many councils do offer the option to pay over 12 months (sometimes this is limited to those who pay via direct debit). Those in Northern Ireland don't pay Council Tax – they pay 'rates' instead.
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17 June 2025
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