A rule change on council tax has Martin Lewis saying he's 'genuinely moved' by the change as one of the most 'vicious' parts of it is being scrapped.
The government is changing how council tax collection works to postpone 'vicious and damaging' practices of debt collection.
Under the current rules, people who miss a council tax payment can be sent a reminder notice after 14 days and a demand for the full annual payment after 21 days.
For the average Band D property in England, that's a payment of £2,343 someone has to find.
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Within six weeks, bailiffs can be sent round - which the people struggling to pay are also billed for.
In 2024/2025, 1.7 million council tax debts were referred to bailiffs, an increase of 13 percent on the previous year, according to the Money Advice Trust.
One of the people affected is a man called Mark. In March 2021, he found himself unable to pay a £101.71 council tax bill, after finding himself hospitalised following a serious motorbike crash, which left him with a collapsed lung, broken ribs, crushed wrist, ruptured spleen and an open fracture in his elbow.
He told the Observer last year that he couldn't afford the bill while on sick pay, and eventually the council demanded the entire year's bill.
Thanks to the addition of admin fees, the £100 bill became a £6,000 debt, and bailiffs were soon at his door.
Mike said he ate bread with ketchup as a meal so he could feed his daughter and didn't have hot water for two years.
According to campaign group Debt Justice, 4.4 million people are currently in debt regarding their council tax bills, adding: "What starts as a missed instalment of £190 can become a £2,280 debt at terrifying speed.
"The cost of a bailiff visit is added to people’s debt – leaving them hundreds of pounds worse off."
What's changing in the way council tax is collected?
Under new plans due to kick in from April 2027 onwards, admin costs will be capped at £100 and households will have 63 days to sort out the money they owe rather than 21.
Essentially it means UK households that miss a council tax payment will have two months to pay what they owe, rather than it being three weeks before they face 'aggressive' forms of debt collection.
One of the big supporters of this incoming change to council tax is the UK's favourite money saving expert Martin Lewis, who has welcomed the change to the rule which he'd said had been the source of 'so much pain'.
"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 said on his site.
"We've spent the last 18 months campaigning hard to change this hideous system, and having seen so much pain caused by it, I'm genuinely moved by this huge first step towards making things better."
Lewis said that he didn't know how people were expected to pay an entire year's council tax bill within a few weeks if they'd missed a monthly payment and that 'no commercial firm would be allowed to do anything close – constituents are treated worse than customers'.
Even worse is people in such a situation would end up having to pay more through 'admin costs' and a 'liability order' and would 'soon see bailiffs sent in', with the changes from next year they will be capped.
Welcoming the changes, the money saving expert said it was a 'hugely welcome change' even if a 'perfect world' for him would involve an even longer grace period and a lower cap on fees.
Calling the outgoing system 'grotesque', Lewis said that making people who missed a payment have to cough up a year's worth of council tax within three weeks was 'often catastrophic for people's finances and wellbeing'.
He warned that it had left lots of people 'needing more help and support', and the old approach was self-defeating as it was 'ultimately the same council having to pick up the pieces'.
Back in 2024 the Money and Mental Health Policy Institute (MMHPI) had called the rule allowing councils to pursue full payment after three weeks 'outdated, outmoded and cruel'.
In their report they'd found that 87 percent of councils England and Wales had used their powers to bring the full extent of the law to bear on people who missed a payment and it was causing 'unnecessary distress' as well as mental health conditions.
They found that 73 percent of people in council tax arrears who were referred to a bailiff have experienced a mental health problem, and that around 6.2 million Brits were behind on some kind of payment to the government such as council tax.
Topics: Martin Lewis, UK News, Cost of Living, Money
Joe Harker