Households across the UK are facing a postcode lottery when it comes to council tax support, according to a new report by the Institute for Policy Research (IPR). The study, titled ‘Council Tax Reduction and Universal Credit,’ highlights disparities that result in some Universal Credit (UC) claimants receiving support while others do not.
The IPR’s report focuses on low-income, working-age households in England and their experience with Council Tax Reduction (CTR)—a means-tested discount aimed at easing council tax burdens for eligible individuals. In 2025-26, a patchwork of 313 separate CTR schemes operated across England, each governed by its own eligibility criteria and rules.
Although nearly all working-age CTR recipients are UC claimants, many UC recipients do not qualify for council tax support. The report notes that claimants in paid employment or self-employment are far less likely to receive this assistance. The think tank warns that there is limited understanding of how low-earning households actually experience and manage CTR.
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To address this knowledge gap, the study engaged 160 UC claimants in work through an online survey, conducted follow-up telephone interviews with 30 respondents who currently or recently received CTR, and held video interviews with five key informants—including local authority staff and specialist advisors well-versed in CTR design and delivery. The research was funded by the Aberdeen Group Charitable Trust.
The IPR recommends reforms such as establishing a standardized national CTR system administered locally or fully integrating council tax support within Universal Credit. Dr. Rita Griffiths, lead author and IPR Research Fellow, explains: “Our findings reveal that people with similar incomes and household situations receive vastly different levels of council tax help, purely based on where they live. Sudden drops in support as income rises can even leave some worse off after taking on more work, undermining incentives to increase earnings and raising concerns about fairness and consistency.”
Dr. Marsha Wood, IPR Research Associate and co-author, adds: “For some working households, earning more doesn’t always mean better financial outcomes if council tax support is reduced. This underscores the importance of understanding how different components of the welfare system interact.”