CSJ analysis finds council tax arrears rose by £782 million in 2025/26 to £7.4 billion

Unpaid council tax in England increased by £782 million in the 2025/26 financial year, taking total outstanding arrears to £7.4 billion, according to analysis published by the Centre for Social Justice (CSJ) on 25 October 2026¹. The think tank said the rise was equivalent to about £1,488 a minute, rounded to £1,500¹.

The CSJ said the £7.4 billion total includes arrears built up over previous years, and that the figures are drawn from the Ministry of Housing, Communities and Local Government's Collection rates for Council Tax and non-domestic rates in England, 2025 to 2026¹. Separately, it said average Band D council tax in England rose by £111 to £2,392 in April 2026, an increase of 4.9 per cent, with some councils making larger rises: Worcestershire County Council increased its share by 8.98 per cent and Trafford by 7.49 per cent¹.

The findings are to be published in Money Mindsets, a forthcoming CSJ report produced with Lowell and Money Wellness¹. The CSJ said that report finds more than half of people in need of debt advice say they "don't know who to trust for financial help and support"¹. It will recommend clearer reminder notices informed by behavioural research, greater use of digital communications alongside letters, and MoneyHelper-branded information sheets directing people in arrears to free debt advice¹.

Adam Rolfe, policy and public affairs officer at Money Wellness, said council tax arrears come up in more than a third of the cases the organisation sees, and that under current rules missing one payment can mean being asked for the whole year's bill within weeks¹. John Pears, chief executive of Lowell, said bills keep rising and more people cannot afford them¹. Lowell's latest Financial Vulnerability Index found nearly half of households had no emergency savings¹.

Why it matters for households

The arrears figure covers money owed to councils in England, and the CSJ says it includes debts accumulated over several years rather than the 2025/26 shortfall alone¹. For households already behind, the report points to the collection process itself: Money Wellness says a single missed payment can lead to a demand for the full annual bill within weeks under current rules¹. The CSJ's proposed changes concern how councils communicate with people who fall behind, including reminder notices and signposting to free advice, rather than the amount of council tax arrears owed¹.

The government has announced that councils will be required to issue both a reminder and a final notice before households lose the right to pay in instalments, alongside extending the time before the full annual bill can be demanded¹. The CSJ welcomed the changes but said additional warnings must be designed to encourage people to engage and seek help earlier¹. Money Wellness said councils already have discretion to give people more time and to point them towards free debt advice at the first missed payment¹. The timing of the government's changes is not reported in the material published with the analysis.

What happens next

The Money Mindsets report, produced with Lowell and Money Wellness, is forthcoming; no publication date has been reported¹. It will set out a wider programme to improve financial education, creditor communications and access to debt advice¹. The CSJ published its analysis ahead of the Budget; the Budget date is not given in the material¹.