A potential policy change threatens to abolish the 25% single-person council tax discount, significantly affecting millions of pensioners living alone.
- Half of the 8.4 million people benefiting from the discount are retirees.
- The discount reduces the average Band D council tax bill by approximately £543 per year.
- Scrapping the discount could compound financial pressures as pensioners also face means-testing for winter fuel payments.
- The largest concentrations of affected households are in areas like Birmingham, Cornwall, Somerset, and North Yorkshire.
Analysis from the Institute for Fiscal Studies (IFS) reveals that around half of the 8.4 million individuals who benefit from the single-person council tax discount are retirees. This discount currently alleviates the average Band D council tax bill by about £543 annually and saves the public purse approximately £3 billion each year.
Angela Rayner, who has not dismissed the possibility of removing the discount, faces criticism over the potential impact on older adults, many of whom are already grappling with increasing living costs. This development follows Chancellor Rachel Reeves’s decision to means-test winter fuel payments, previously offering up to £300 to around 10 million pensioners, in a bid to save £1.4 billion for the Treasury.
Jan Shortt, general secretary of the National Pensioners Convention, denounced the potential removal of the discount as an ‘unforgivable betrayal’ that could drive pensioners out of their homes. ‘It seems older people, who have no voice in parliament, are seen as easy targets,’ she stated.
Conservative MP Graham Stuart also voiced his concerns in the House of Commons, underscoring the financial burden on pensioners losing both their winter fuel payments and council tax discounts. ‘That is taking hundreds of pounds from those that can least afford it. We cannot have such an unnecessary impact on pensioners,’ he remarked.
In the Commons, Rayner assured that there are no current plans to hike council tax but refrained from guaranteeing the retention of the single-person discount. She commented, ‘This Government is about making sure that working people are better off, and we intend to do that.’
Figures from the Ministry of Housing, Communities and Local Government underscore that approximately 8.4 million homes in England currently benefit from the 25% discount for single occupants, with a further 253,000 households eligible due to specific residency criteria. Data from the Office for National Statistics (ONS) shows that half of those living alone are aged over 65.
The highest number of single-person households eligible for the discount is found in Birmingham, where 152,000 individuals reap the benefits. Other significant areas include retiree-friendly regions such as Cornwall, Somerset, and North Yorkshire. The UK population’s ageing trajectory has led to an 8% rise in single-occupant households over the past decade.
Caroline Abrahams, charity director at Age UK, highlighted that older people living alone are already contending with significant challenges related to fixed household expenses that do not diminish for single occupants. ‘If the single person discount for council tax was abolished, many pensioners—particularly widows—could find their finances severely strained, especially if they also lose their Winter Fuel Payment,’ she warned.
Despite assurances from a spokesperson for the Housing Department that there are no immediate plans to reform council tax, the potential changes have incited concern among pensioner advocacy groups and MPs alike.
The potential abolition of the 25% single-person council tax discount could severely strain the finances of millions of pensioners, highlighting the need for careful consideration of its broader impacts.
