Council Tax is calculated based on the property valuation band (A to H in England and Scotland, A to I in Wales) determined by the Valuation Office Agency. The local council sets an annual charge for a Band D property, and the tax for other bands is calculated as a fixed proportion of that Band D amount. The total bill also includes precepts for local services like the police and fire services.

Since the 2010s, local government funding from central government has been significantly reduced. To compensate for these cuts and meet the rising demand for adult social care and children’s services, local councils have been forced to raise Council Tax year after year, often outpacing the growth of average wages.

The UK government sets a ‘referendum limit’ (or cap) on how much local councils can increase Council Tax without holding a local public vote. Historically, this has been around 2% to 3% for general services. However, councils can often add an additional ‘social care precept’ (usually up to 2% or 3%) specifically ring-fenced for adult social care, allowing total increases of 4.99% or even 5% in recent years.

Real wage growth measures how much your purchasing power has increased after accounting for inflation or specific cost increases. To calculate it, subtract the inflation rate (or the growth rate of a specific cost, like Council Tax) from your nominal wage growth rate. For example, if your salary grew by 20% but Council Tax grew by 30%, your ‘real’ income relative to that tax has actually shrunk.

Yes, in the vast majority of cases. While it is technically possible for a council to freeze or lower Council Tax, almost all local authorities in the UK have increased it annually over the last decade to balance budgets and fund essential services, meaning it has become a consistent year-on-year rising cost for households.