A recent report by the Resolution Foundation has revealed that the poorest households in the UK are spending an increasing share of their income on council tax, which has risen by 77% in real terms since 1994. In the 2020-21 financial year, the poorest fifth of households dedicated 4.8% of their income to council tax, up from 2.9% in 2002-03. The report highlights that stagnant wages and a decline in social security benefits have exacerbated this financial strain, making council tax resemble the old Poll Tax.
The incomes of poor households haven't risen enough in recent decades, as the UK economy has stagnated. But where their money comes from and what it is spent on has changed considerably.
Council Tax is consuming a larger share of their poor families' household budgets, who are spending almost as much on these bills as they pay in Income Tax.
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