Council Tax Reduction and Universal Credit: Winners and losers of the postcode lottery (Policy Brief)

Eligibility, entitlement and assessment criteria for Council Tax Reduction (CTR) – a means-tested discount on council tax for low-income, working-age people – have been left to the discretion of local authorities in England since 2013. In 2025-26, there were 313 separate CTR schemes in operation, each with their own eligibility and entitlement rules. Virtually all working-age people who get CTR are now Universal Credit (UC) claimants, but not all UC claimants receive CTR. Claimants who work are much less likely to qualify for help.

Little is known about how low-earning households are experiencing and responding to CTR. To help fill this evidence gap, this study explored how the different elements of scheme design in England are affecting take-up, household finances and work-related decision making among UC claimants who work.

The research comprised: an online survey self-completed by 160 UC claimants in work; telephone interviews with 30 survey respondents currently or recently in receipt of CTR; and video interviews with five key informants, including local authority officers and specialist advice agencies with in-depth knowledge and experience in the design and delivery of CTR schemes.

This policy brief summarises key findings and recommendations.

The research was funded by Aberdeen Group Charitable Trust (registered charity number SC040877).