Government update on calls for council tax discount for pensioner | Retirement | Finance

The UK Government has provided an update in response to calls for council tax to be discounted for pensioners. Thousands of Brits had signed a petition asking for a reduction in council tax payments after retirement.

The petition, which ran for six months, urged Parliament to legislate for a council tax discount for all pensioners. Campaigners explained:”I feel that current council tax rates do not take pension incomes into account.

“This means some pensioners are having to pay what I think is a very significant percentage of their pension towards council tax.

“When many pensioners have worked for 50 odd years, paid into a pension, bought their own house, then retire on a lower income, I do not think they should have to pay such a significant amount of council tax.”

A total of 11,201 people signed the petition by the time it had closed. When a petition hits 10,000 signatures the Government is supposed to provide a written response.

Replying to the demands, HM Treasury explained that there are “no plans” for a mandatory council tax discount for all pensioners. It highlighted that council tax is an “essential” part of council funding, needed to provide more than 800 local public services.

It said: “To ensure fairness in the system, there are a range of discounts and exemptions to reflect personal circumstances. Councils are required to put in place a centrally prescribed support scheme for pension-age households.

“This ensures that the lowest-income pensioners are not required to make any contribution towards their council tax. In March 2025, 1.4m claimants were being supported by the pension age local council tax support. The government has no plans to introduce a mandatory discount for all pensioners.”

Recently, the full rate of the new State Pension rose to £230.25 per week, which is more than £12,000 per year, after an increase in line with average earnings. The basic State Pension has also increased to £176.45 per week, which is more than £9,200 per year.

HM Treasury added that pensioners on a low income could be eligible for Pension Credit, which guarantees a minimum level of income for low-income pensioners. Pensioners receiving Pension Credit also receive other benefits (help with council tax, fuel bills and a free TV licence for those over 75).

The Treasury added: “The Government has announced that everyone over the State Pension age in England and Wales with an income of, or below, £35,000 a year will benefit from a Winter Fuel Payment this winter. This extends eligibility to the vast majority of pensioners, with around nine million, or over three quarters, benefitting.”

Other key supplementary benefits for low-income pensioners include:

• The Warm Home Discount (rebate on energy bills)
• Housing Benefit (help with rent)
• Discretionary Housing Payments

Your council tax rate will vary depending on the value of your home and where you live. To check what your rate is, visit the Government website here.