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Last Updated: Saturday, 26 November 2005, 00:00 GMT
Council tax hits elderly hardest
Council Tax notice
Bills have risen far faster than wages
Council tax rises are hitting the finances of pensioner households far harder than those of younger people, according to research from the Halifax.

On average, council tax accounts for 6% of household income amongst the over 75s, twice the rate for the under 50s.

Overall, council tax bills have risen 121% since 1993 compared to an 83% increase in average salaries.

But pensioners feel tax rises more keenly because the state pension increases only in line with prices.

In addition, many pensioners live in large houses which attract a high council tax charge.

With each year that passes, inflation-busting increases in council tax and other household bills completely swallow up the small rises in the basic state pension
Anna Pearson, Age Concern

Important issue

Halifax found that 18 of the 20 local authorities in England with the highest proportion of pensioners have seen their council tax bills rise faster than average.

Chichester in West Sussex has seen the biggest jump among these 20 local authorities, with tax bills rising 173% since 1993.

Likewise, in Christchurch in Dorset - where nearly a third of the population are of pension age - council tax bills have risen 171% since 1993.

"Clearly council tax is an important issue for older residents. The tax accounts for a higher proportion of their spending than for younger age groups," said Tim Crawford, Halifax group economist.

"Pensioners' incomes have not kept pace with the significant growth in the rate of council tax."

In the light of the Halifax research, pressure group Help the Aged reiterated its call for changes to the council tax system.

"With each year that passes, inflation-busting increases in council tax and other household bills completely swallow up the small rises in the basic state pension leaving many of our older people struggling to make ends meet," said its spokeswoman, Anna Pearson.

"The government should urgently reform council tax so that bills are based on ability to pay instead of on the value of homes in which older people live."

Sylvia Hardy, who went to jail for non-payment
Many pensioners have protested tax rises

Pensioners have played a leading role in the anti-council tax rise protests.

Some campaigners have declared themselves willing to go to prison rather than pay increases they say are unfair.

Benefit call

Halifax's research did not take account of pensioners claiming council tax benefit.

At present, 2.4 million pensioners are receiving the benefit.

But Age Concern has estimated that at least a million older people are failing to claim, mainly put off by complexity and fear of means-testing.

The Local Government Association (LGA) called for an end to means-testing of council tax benefit.

"Council Tax benefit increases with the financial hardship older people suffer," said Sir Sandy Bruce-Lockhart, chairman of the LGA.

"However, it is time that all pensioners automatically get these benefits as an entitlement without the embarrassment of being means-tested."


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