Tax hike 'will affect pensioners'

27/03/2009

Council tax is to increase by an average of three per cent over the next year, the Department for Communities and Local Government has announced.

This is the lowest rise recorded for the last 15 years - but comes at a time when household budgets are being stretched by the credit crunch.

Each local authority in the UK sets its own council tax, subject to central government approval - meaning that increases for householders in some areas will also be much steeper than three per cent.

The increase also sparked concern among charities, who said that some vulnerable members of society were ill-equipped to cope with a tax increase in the current financial conditions.

"Any rise in council tax, regardless of the percentage, is going to be difficult for pensioners on low, fixed incomes," Anna Pearson, policy manager for Help the Aged, said.

"This is yet another essential cost that will put a strain on people's finances."

EuroDebt director Kevin Still said: "The new tax year often brings new annual bills and new benefit allowances which need to be checked carefully to re-assess monthly budgets and avoid surprises. A three per cent increase in an economy suffering deflation with evidence that essential living costs are still going up is not good for many that are struggling to make ends meet.

"Many individuals are on fixed incomes, but many others are having to take pay cuts or reduced hours, thereby reducing household income. Council tax is a priority expenditure and may put your home at risk if payments are not kept up-to-date."

Local government minister John Healey commented: "Today's figures show that the vast majority of local authorities have kept increases to a minimum."

Tags; Budgeting Advice, Retirement Money Problems,

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