'We've had a win today': Martin Lewis celebrates council tax reform

Added: 2026-05-05

[00:00:00]So, we had a win today and I'm I'm actually very happy. It's not often in this current environment you get some good news coming out. For the last 18 months by my charity, the Money and Mental Health Policy Institute, we've been campaigning about council tax debt collection.

[00:00:13]>> Council tax debt collection is the most penitious and aggressive and rapid form of debt collection. It would make banks blush. No commercial company would be able to get anywhere close. Here's how it works right now.

[00:00:27]If you miss a monthly payment within three weeks, the council is allowed to say, and the vast majority of them do say, you now need to pay for the whole year.

[00:00:39]>> Whoa.

[00:00:39]>> How someone who can't pay for the month can pay for the whole year is beyond me.

[00:00:43]But what do I know about money? Then within 3 weeks of that they can take you to court add an admin charge typically £150 and send the baiffs in for the year's debt plus the admin fee on top.

[00:00:58]There are 3.3 million people in the country we think in a rears on council tax in 2024 25 the last year we have stats on baiffs was sent in in 1.7 million times this is a hidden undertalked about issue that affects a whole class of people in society who are never being protected and it because you heard mental health in the name of thy charity that we do on this >> it is particularly dangerous for those people with mental health problems because you're three times more likely to be in crisis debt anyway if you have a mental health problem than everyone else. But today we got good news.

[00:01:33]>> That's incredible. Before we go on to the good news, what how did this come to your attention in the first place?

[00:01:39]>> So I mean so many case studies. When I set up the money mental health policy institute, which is a brilliant charity, we have a lot of success. We we do do lots of good work.

[00:01:46]>> Extraordinary thing >> and we have, you know, there's amazing 30 full-time staff. One of the things I wanted to do that was a bit different is I I've you know our team are really clever people who've got great education and they come up with incredible policy solutions but there is an issue with people who work in policy that they can sometimes be an ivory tower and not understand how it works practically on the ground. So I recruited at the start a lived experience panel. So we now and we still have it as over 5,000 people by the way as I'm on. We under if you've had mental health problems we'd love you to join the panel. It's could just go on to the website money and mental health policy institute but we under index especially on younger men and men from ethnic minorities. And so we would love more of you. We'd love more of everyone but we'd especially love more of you to come and and all you do is you feed into what we're doing. And this came from our lived experience panel. got over 5,000 people and they were saying this is one of the biggest problems we face. So we then looked into it, started campaigning and doing policy on it. So this has come from our people who have money and mental health problems telling us this is one of the things we need to prioritize fixing and >> and give us an idea of if not the worst case scenario but but a relatively commonplace catastrophic set of circumstance. I had a case study this morning of a man who um had a motorbike accident, was in hospital, and he had his move from one week to uh from one month to a a year while he was in hospital cuz he hadn't been home and he hadn't paid his cancer tax, funnily enough, because he was in hospital having had a serious motorbike accident.

[00:03:08]We had a woman who due to the postal delays got her notification about having to pay for a year on Christmas Eve. Um but she hadn't and and she needed to pay by Christmas Day because of postal delays because it was only a 3we window.

[00:03:20]There's no breathing space. And these are demands for a significant chunk of change.

[00:03:23]>> Yeah. Yeah. Grand >> obviously that these people won't be able to find >> and then so she went and got credit card debt at 40% interest catastroph catastrophized the finances. And guess who has to bail you out when you're in trouble? The councils. It's counterproductive. So what what has been announced today? We had a consultation last year. This is the good news bit.

[00:03:41]>> Yes.

[00:03:42]>> And I'm very you know I met Angela Rainer about it first and she was brilliant. She got it and then I I I we got a live on Good Morning Britain and then Steve Reid who's the minister now.

[00:03:50]got it. That 3 weeks is to become 63 days. So if you miss a monthly payment, a council cannot and they can go longer if they want. A council cannot ask you to pay for a year within until 63 days.

[00:04:03]So you've got two months. Now 2 months is similar to the breathing space scheme that you have for consumer debt. Yes.

[00:04:10]Which means if you're having a problem, 3 weeks is not long enough to sort it out for most people. Listen, let's be honest. My my phrasing in my press quote on this is this is a great first step.

[00:04:20]I'm not saying this is a solution or what I would have done if I was in charge, but this is a monumental improvement and they're capping the admin costs that can be added to £100. I would have liked to see it at 70, but currently many charge 150. And this is this is the first change in council tax debt processes for 33 years. And when you speak to the debt counseling agencies, your citizens advice, your national debt line, your step changes, and you talk to them about debt, they say, "We always prioritize council tax because it is the most dangerous council tax debt collecting way worse than normal consumer debt." You know who's second worst after council tax?

[00:04:56]>> No.

[00:04:56]>> Central government debt collection.

[00:04:58]>> Really? Yeah.

[00:04:58]>> Do we know why?

[00:05:00]>> Yeah. Cuz they don't have any of the consumer protection because they're not regulated like the FCA regulations and there's no consumer duty like consumer lenders have. And also when you start to talk to governments about it and they go well that might reduce the amount that we crack.

[00:05:12]>> But I was wondering about that because this is revenue as well as >> it is. Now my argument on the council tax thing is actually we don't believe this is going to cost councils any money because ultimately if you're asking people to pay for a year and they don't have the money to pay for a year, you're not getting it. And the end result on people's finances and well-being which leaves people in a worse state. I mean it has really hardcore impacts. You will have lots of people this has happened to who can't deal with it. Actually puts burdens on councils and there is there are there are councils out there who've tried to go a different way. The vast majority just go as hard and fast as they can who've employed their own debt collectors and put in different places where their bailists go in and offer help. And one of the other things changes that's going in here is in those 63 days and we're still talking about the mechanics of this with the government the councils will have to signpost people for help with their debts. So rather than going 3 weeks want all the money, it'll be just so you know we're if you don't pay this in time, you're going to have to give us all the money, but here's somewhere you can go to help to get your finances in order so you can pay.

[00:06:18]>> It's often the way, isn't it, with debt that that those of us lucky enough never to have fallen into these sort of holes presume that that it's it's it's like a sort of mandibles that they get you and they grab. But but usually if if you phone the right people or if you contact the right organizations, they're keen to help you get through it because of the reason that you've just highlighted >> within the consumer sector. Yes. But not within the council sector. And that's that's why we're raising yet. Yeah.

[00:06:41]Because ultimately demanding people to pay when they can't pay doesn't work.

[00:06:45]>> Right. So what you actually have to do is you have to put So there's a difference between won't pay and can't pay. And most of these cases are can't pay. And so what you actually do is is get people into a position where they work. So another thing money in mental health has done which is now being piloted and this is one of our other big campaigns is within mental health counseling centers they're now going to embed debt counselors because the link is so strong and over 70% >> you know forgive me but I'd have hoped that was already in place.

[00:07:11]>> No no it's not. But but we've got it's the pilot is yes >> and I I I'm semi- makingaking this stat up some it could be 60. It could be 80.

[00:07:19]I'm going with 70 because I can't remember. It's 3 years ago I read the document. 70% slightly made up of mental health case workers and counselors are spending a significant portion of time of filling in financial forms for their clients and they're not professionals at it. So our idea was why don't we get the mental health people to do the mental health and let's get the debt and money professionals who actually cost less generally to do debt and money help in the same place at the same time and and also if you've got financial problems the treatment time for clinical depression is thought to take 18 months longer. Right? And if you and and if you've got mental health problems, you're three times more likely to be in debt. The idea that these two are discreet. They're not discreet. They're completely interdependent on each other.

[00:08:00]And sorting out people's finances helps their mental health. And sorting out people's mental health helps their finances. And stopping coming in and using a blunder dust. If you can't pay a monthly council tax, but you'll have to pay a year and treating constituents worse than customers seems to be quite a sensible way for me to go for me.

[00:08:17]>> A few people pointing out you you've clearly had your weabics this morning, Martin. Well, I did mention I was meant to be on my way to the gym before I came and I had my sort my performance-enhancing caffeine, which I don't normally have when I'm on air. So, uh, forgive me, I'm wild.

[00:08:28]>> No, it's it's absolutely lovely to see you with your dander up, but it's lovely to see you all the time. And while I have you, because people will have picked up on your you you you are close to euphoric about this. The report that um uh that the u money and mental health policy institute published was only in 2024 and you now have government action on something months is amazing. I mean, that is absolutely incredible, and it it explains in part your um your joyous demeanor this morning, but and I've asked you this before, but I want other people to hear your answer to this question. Why do you care?

[00:09:00]If you Sorry, you got me there. Um, you meet I meet I meet people walking in the street, James, and there is a sense of desperation for many people and and especially on this counter tax issue. I can't tell you how many desperate people I met. It's why I burst into tears when I got when we first said they do the consultation.

[00:09:24]I've met so many desperate people that this has just ruined their lives. And you can't not have that rub off on you.

[00:09:32]you can't. And I have spent my whole career trying to help people with their money. I've been incredibly financially successful on the back of it. Uh some of that is talent, some of that is hard work, some of that is skill, but a lot of that was luck. And I think there comes a responsibility when you've been successful, >> uh and which will always be due to an element of luck that you need to pay it back. And I'm in this bizarre, highly pressured and stressful and it makes me ill with it at times >> position that if I start a campaign in my area, please be everybody know doesn't work outside my in my area.

[00:10:04]>> I probably and I hope this isn't self grantizing. I I probably have I'm the person who can deliver it most quickly and most effectively. So, I can't do every campaign and lots of people wants me to do things that I can't, but we took this one on and we've delivered it within 18 months. And that makes me really happy cuz I have met so many people won't change their lives cuz it starts in April 2027, but I know the soft impact on millions of voiceless people that this will have and that that's why I care. I don't know if that's a proper answer or not, but I wasn't expecting the question. It's an absolutely perfect