Council Tax Cost Cutting Special: 5 ways to try to cut your bill & possibly get £1,000s back

22:40Martin Lewis:And if you find that the pad is wrong, that is the big light. And we've had quite a lot of people who are in the wrong band have looked at their pad and gone, no, that's not correct about my house. And that's the strongest possible evidence. Now, let's be plain here. If you're saying you're in too high a band and it says you've got two bedrooms and you've got four bedrooms, that's not the right way round. If it says you've got four bedrooms, you've got two bedrooms, that is the right way around. I mean, let's be sensible of what we're talking. But a crucial stage, Minesh, you have to get your pad details and you have to go and check, are your pad details correct about the property?

23:17Martin Lewis:And if they are, well, that's very strong. And what you then need to do is you then need to then go and identify neighbouring or nearby properties. This is for informal. You don't have to do this in a formal challenge, but I would do it anyway. And when I say in this step, identify neighbouring or nearby properties, this isn't like you did in the checks. We're now in the challenge phase. This is going to take real work. You need to be identifying up to five addresses in the same street or estate, though in the countryside, the Evaluation Office Agency will consider similar properties with an area as wide as 10 miles.

23:49Martin Lewis:They must have the same style or similar features. So semi-detached house must be compared with semi-detached house. They must be of a similar age. Don't compare the new build with the Victorian one. They must be of a similar size. Comparable properties can be smaller and larger, within 10%. And you're then looking and saying, look at all these details. The details you have on me are wrong. I'm going to give you a comparator to five of that, ProHouses, and that is why I think I'm in the wrong band. So look, and we need to be honest, we're on the radio here. This is a process and you will be able to find step-by-step help and templates to do this process online.

24:26Martin Lewis:Really what we're talking about today is the clarion call of what you should or shouldn't be doing, whether this is or isn't right for you. So the next stage to go through is to go and use the online help that's available to get you through this. Nicola, re-challenging banding in a new build house, in terms of finding similar properties, which are the implication being that the new build is different to the surrounding ones, can I use, say, a house built in the 1970s? It feels like new builds get higher banding just because they're new. And when you get the banding notification, there's absolutely no explanation of how it was determined.

24:59Martin Lewis:None of this system is transparent or good. I mean, it shouldn't work this way. And interestingly, one of the things, we've talked before on the show, I got the government to change council tax debt collection recently, and we'll be talking later about discounts, including severe mental impairment, which we got them to change some rules as well. One of my requests was to get rid of the formal informal rules where you have to do the challenge within six months, because I think it's ridiculous, because people don't know how it's been going on. They will look at that, but they haven't done it yet.

25:24Martin Lewis:So look, you're right. If you're in a new building, and you're the only new build home in your area, it's really going to be very difficult to do this. And I don't think it's fair to say, I have no evidence to say that new build homes are valued on too high a band. But clearly, new build is a very difficult comparator to an older house if you are the only one. And people won't like me saying this, but there's a bit of shrug your shoulders here. There's a bit of the system's broken, you do what you can do. And if you can't do any more, you can't do any more. No, that's it. Willow, I need to change my band.

25:59I need to change my band. I've no idea where to start finding the price of my property from years ago. Willow's situation is they're in a row of terrace houses, which are in Band B, and the rest of the very long road is in Band A.

26:12Martin Lewis:OK, so she's in Band B, everyone's in Band A. If your house has not been bought or sold since 1993, well then, if you're telling me they're all identical properties, one of those houses on those streets will have been bought or sold since 1993. You go on to the right moves of this world and the property price trackers, you can find what other properties have been bought and sold for. Then you need to convert it back to 1991. So you're just looking, find the most, if your house is, you've been in it a long time, find the most similar house to yours. And in fact, if there are three or four that have sold, get all of the prices, work out what they were worth back in 1991.

26:51Martin Lewis:You know, get the prices from the property websites that are free. You can just do it online. It's dead easy. And then convert them all into 99 to one prices and take an average and see if that works for you. Okay, great. Did you bring your BAFTA in to show me, by the way? I've got a bad shoulder and it's properly really heavy. It weighs about four or five kilos. That's the worst injury ever. I've put my shoulder out. I've got a BAFTA. Carrying all my awards. Oh, I've hurt my shoulder. No, I didn't bring it in, but it was very, very lovely to get. and it was an incredible night. There was a lovely photo of you and Laura.

27:25I felt not tearful exactly, but I had a little catch in my throat when I saw it.

27:30Martin Lewis:Well, I cried during my speech and then they cut to my poor wife who was looking beautiful with, you know, crying her eyes out with the mascara running down. But then again, I've had so many wonderful messages. In fact, thank you to everybody who sent me lovely messages. But most people told me they were crying too. So I think maybe we all had a bit of a cry as a nation during the middle of it. OK, does you good every now and then.

28:11The tellers is in the wrong file.

28:21Martin Lewis:So that's good. What's the biggest money secret you've ever kept? When was it? Who was it? Secret from and why? And why is it OK to tell now? Quite a lot of people say, well, it's a secret. I'm not telling you. Yes, in the question it said, and why is it OK to tell now? So I don't want you to tell your secrets that are secret. I want you to tell your secrets that were secret. So why don't you start, Adrian? OK. Do you know what? I've got... Shall I start? You start. I'll do Ronnie. I've got... This is going terribly well. because I've got last week's tell us. Yes, so did I. Yes, that's why. But if you go in there, you send the file below.

28:59Martin Lewis:Ronnie had a boss that gave me a fiver every week to take his car to the car wash. I used to take it to my house and wash it in my driveway. That's not a bad little secret. You're still washing the car. You've got a fiver for it. That's relatively entrepreneurial. I don't think that one's too bad. Shall I carry on? I've got ones that have just come in, actually. OK, so all the planning and work I do to select a perfect format and mix them up is all going to go to pot. You go for it. It's a bit like that Two Ronnie sketch where we're doing last week's Tell Us This Week, answering the question before.

29:30Where are we? Yes, my wife and I open child trust funds for both of our children. We plan to ensure they both had 10K when they became 18. Kept it from them until they were 14 and 16, so not letting them know that's there.

29:45Martin Lewis:I think that's a pretty common secret from your children about the money. As an aside, the government is writing to 750 ,000 21-year-olds at the moment to tell them where their child trust funds are. Child trust funds predecessor to the junior ISA, but the state added money. The average amount in them is£2 ,000, but many have lost track of them. So if you get that letter, it will tell you who your child trust fund provider is and then go directly to that provider. Be careful going through anywhere that you're told to because it might be a scam and then see if you've got the money. But for everyone aged, well, it's around 15 to around 23, has money in a child trust fund unless you've accessed it already.

30:20Martin Lewis:Millions of people have lost touch with them. You can go to gov.uk and find where your child trust fund provider is. As I say, the average is£2 ,200. Some may have less, some may have more, depending on whether money was added to it, whether it was saved or invested. Just on the gov.uk tool, if you're under 16, a parent must use the tool. if you're 18 or over you must use it yourself if you're 16 to 18 it can be a parent or guardian or the child themselves massively important that people are reconnected with their child trust funds I've got another one here I like this one actually I won£5 ,000 with Brighton Hove Albion in 1992 it was a fighting fund for supporters to keep the club going through tough times I kept it secret from my mates until I was called onto the pitch at half time on Boxing Day to collect my novelty size.

31:10Martin Lewis:You were so outed. Thankfully, none of those problems now with Tony Bloom in charge, so that's a good thing. Phil, my wife passed away on the 2nd of October 2015. She always put more money away without me knowing. My mum said, have your own money. Never told me, but ha-ha, our daughter knew. Oh, and then he says, P.S. Misser. Wishing you the best, Phil. And it's good you miss her. You loved her. Keep her in your heart, mate. Mike, as a teenager, my dad would weekly ask me to put£25 off Keelney's car but I always put£20 in and pocketed the£5 he even had the car into a garage as he was convinced the MPG was sold he passed 20 plus years ago and I've come to terms with knowing I'm going to hell poor Mike Joe, kept throwing extra money I had at the mortgage and didn't tell him that I'd paid it off Kept it a secret for three months until his birthday, then gave him a card with the letter from the bank in it saying your mortgage is closed.

32:08Martin Lewis:He thought we still owe£20 ,000. He was saying, I don't know how you did it. I don't know how you did it. Constantly for the next fortnight. Good secret, that one. Good secret. Kirsty bought a beautiful but very expensive olive tree at Chelsea Flowers Show about 10 years ago. My husband still thinks I'm going to want it in a raffle. There's a lot of that goes on. I mean, this is all, we're doing the nice stuff, but actually hidden debts are a really big problem and you need to come clean about your debt because if you've got any joint problems it can affect the credit score of the other person as well if you've got any joint accounts together.

32:39Martin Lewis:Rhiannon, when I was eight I purposefully put 21 penny sweets in a paper bag at the shop and paid 20p. Rhiannon, the guilt ate me up so badly that the next day I only put 15 sweets in the bag and paid them the usual 20p. I've never forgotten it. I felt like a criminal and couldn't live with myself. In a similar vein, 40 plus years ago, the post office counter assistant overpaid my family allowance by£10. I went back in and said it wasn't right. She pointed to a sign saying, mistakes cannot be rectified when you've left the counter. So I walked away and kept it. Well, that's not a similar vein to me.

33:18Martin Lewis:I think she did everything right, didn't she? The first one, yeah, she stole a suite, but then she paid back five times its worth. So she, you know, what do they call it? Justice, restorative justice there. That was absolutely fine. Voluntary restorative justice. In this one, I mean, they can't have it both ways. They can't say when we underpay you, it's done, you've accepted your money, but we overpaid you, you have to give it as back. I think that's absolutely fine. And she was told she went and did everything she could try. David, I won£10 ,000 on the lottery and didn't tell anyone for years, as I knew they'd all suddenly become friendly.

33:50I mean, there must be a figure for the biggest lottery win that somebody's managed to keep completely secret from everyone.

33:56Martin Lewis:Yeah. Well, it'd be millions, I would have thought. Yeah, but I mean, how do you keep millions secret? You just move. Well, yeah, but that would reveal you had some money for the move, wouldn't it? Well, yeah, but not everyone who wins the lottery doesn't have any money. No. No. I'm being purely hypothetical here, but I can see a situation where somebody's got says, actually, we've decided we're going to emigrate and go to Australia. We love you, all you folks. And then, you know, they move from their two up, two down into their 200 up and 200 down when they get there. Yeah. Let's do one more.

34:25You do, Lou, do Linda. My 94-year-old dad told me recently how his mum, my grandmother, purchased a brand new set of sheets. Every time she was short of cash to fund her bingo trip, she'd then get the sheets out, still in their packing, and tell her husband she'd had to buy new sheets for their home. He then gave her the money for the sheets, which then went back in the cupboard for next time. Grandad never tumbled to her secrets. Tumbled dry to her secrets, yes.

34:52Martin Lewis:What a sheet trick. Yes, very good. you've got to look at how do you do these terrible puns and still win a BAFTA I think that's what I got them for it's just saying your BAFTA bracket not for the pun lifetime achievement for punning you would have got it three years ago if I hadn't been for the pun thanks mate

35:11Martin Lewis:shall we get back to council tax now because we've done council tax check and challenge and as I say if you're looking at that go and step by step it but there are lots of discounts and council tax support that people are missing out on as well so we should probably move to that talk us through the basics of that So we'll do council tax discounts now. This does get, I'm sorry, this does get a little complicated to explain. I'm going to try and do my best. So council tax is based on how many people live in the property. So the standard number is two or more. If it's two or more, you pay the full council tax.

35:44Martin Lewis:If it's one, you get the single person discount, which is 25%. But then there are categories of people who are disregarded for council tax. In other words, in a good way, that's not a bad way, in a good way, you're disregarded. You don't count. Therefore, if two adults are living there, but one of them doesn't count, then you effectively get the 25 % discount. That's the simplest way to explain, although it does get more complicated, but have that as the big picture starter. So let's go through the different categories of discounted for council tax, not counted as an adult. Well, someone under age 18 is pretty obvious.

36:25Martin Lewis:Full-time students on a minimum one-year course, full-time is another obvious one. And then the next one is the severe mental impairment discount, which is a severe impairment of intelligence and social functioning, which appears to be permanent. Now, I hate that term SMI. I actually use to say SMI because I don't like saying severe mental impairment. They are changing it as part of the results, some of the things that we've looked at campaigning, to a severe cognitive impairment. To get a severe mental impairment, massively under-communicated, nowhere near enough people know about this. Common conditions include dementia, Alzheimer's, severe strokes, severe Parkinson's.

37:07Martin Lewis:You have to be medically certified as having an SMI. So a doctor is going to have to certify that you have one. And often it'll be your partner or your loved ones who are getting you that certification. And you need to be receiving a qualifying benefit. Now, interestingly, on SMI, not all the qualifying benefits are means tested. Attendance allowance is a non-means tested benefit for people who need help with living during the day or night. So it is still possible anyone can get an SMI discount, even with that receiving a qualifying benefit, because there are some non-means tested benefits in there.

37:39Martin Lewis:So it's not all about the money you have. So those are the three anyway. Under 18s, full-time students, SMI. And I should note another one of the big wins we had recently, and I am showing off about it because I've been talking about this for a decade, and we've got Wales to do it first. Now England is going to be following suit next April. I've said to you before, this sounds trivial, Adrian, but councils under-publicise the SMI, and then their forms are all different, which makes it's incredibly difficult for someone like me to give guidance of how you fill a form in, right, for many vulnerable people.

38:08Martin Lewis:And the government from next April has agreed it will have one form and one piece of publication. So wherever you go, it will be a standard format. So me and Carers UK and Alzheimer's, we can all actually give you nice ED guidance to filling in the form, which you can't do at the moment because every form is different. Not every form is different. Lots of councils have different forms. Then, so you've got those three. Then you've got live-in carers. That's someone who is unpaid, caring for over 35 hours a week and not caring for your spouse, partner or a child under age 18. So then you are a carer.

38:40Martin Lewis:So let's go through it. If there are two adults, qualifying adults living in the property, even if there's also full-time students, even if there's also people with SMIs, you pay the full amount. The other people don't matter. You've just got to have two. And if there are two qualifying adults, if there's one adult with an under 18 or a full-time student and or a carer, it's 25 % off. If the only people living in the house are someone with an SMI and a carer, which is a common situation, you get 50 % off. So that's the sort of one that doesn't make sense in a way. And if only discounted people are living together, for example, a household of full-time students, you do not pay any council tax.

39:23Martin Lewis:If someone with an SMI is living with an adult, a single adult, you would get 25 % off, another common situation. And in some cases, these discounts can be backdated, but it's council by council. Something else we've asked them for that they haven't decided yet is standardised backdating rules. Wales has it and Wales backdates since the time you were eligible to claim. OK, we've had questions on all this. Anna, how about getting the powers that be to give us a single peeps, a 50 % discount off council tax instead of the 25 %? It's not fair. I'm going to do an explanation on this, not a judgement.

39:56Martin Lewis:OK. When council tax was first set up, it was meant to be based on the value of the property. The previous local taxation, the community charge, was based solely on the number of people in the property. So they tried to get away from that because of the riots that we talked about earlier. But then there was a big lobby that said, hold on, this isn't fair. What happens if you've got one person living in a three-bedroom property? You know, they're going to be paying the same as six adults sharing that same property. So there was a SOP done for that, which was the single-person discount, the 25 % off.

40:27Martin Lewis:Now, people always say to me, why isn't it 50 % off? and I'm not arguing that it should or shouldn't be. That's a political decision. But I'm not sure why people, well, I know why people say 50%. They think, well, two adults in a home, therefore if there's only one adult, it should be half. But who says there are two adults in a home? Some homes, you've got two 19-year-olds living there and their parents, that's four adults. You've got a household of young people sharing and there are 10 of them, that's 10 adults. So the idea that there are two adults living in all homes, therefore if there's one adult living in a home, you should get a 50 % discount.

40:59Martin Lewis:That logic doesn't 100 % stand up, although I know why people say it. But the answer is, why is it only 25 %? Because this was done in 1991 and hasn't been changed since then. The system is broken. Pirani, I'm a carer for my father. We live together. He gets his pension attendance allowance and I get carer's allowance. Should we be able to get a council tax reduction? Well, if there's only the two of you in the household, I would think you're entitled to at least the 25 % if your father has a severe mental impairment. Now, the fact he gets attendance allowance signifies to me there's quite a chance he would be due a severe mental impairment discount.

41:36Martin Lewis:So you tick the getting a qualifying benefit. It is about a doctor certifying that you have. Let me just check the exact phrasing. It is a severe mental impairment that affects someone's social functioning. Right. So if a doctor will sign that off, because just getting attendance allowance doesn't mean you get SMI. You need it to be signed as an SMI. well, then you're certainly entitled to a 25 % discount and possibly entitled to a 50 % discount if you're a carer in the right circumstances. Helen says there is a reduction of one band available for people who have to live downstairs in a two-storey house due to ill health.

42:12This isn't well publicised.

42:14Martin Lewis:I was coming to it, so I'm delighted to get that question. Basically, if you have disabilities, physical disabilities generally, and you have to make adaptions to your home because of physical disabilities, you can ask, and you have to repeat this every year actually the others are sort of automatic each year this one you have to ask every year for a reduction of one band level and it's worth looking at for people in that situation Claire, are... The desk just lowered, I think you pressed a button to lower the desk it sort of touched the top of my knee Unless there's an earthquake No, I think it was definitely a deskquake

42:52Shambles, Claire Yeah.

42:54Martin Lewis:That doesn't account as adjusting your property, by the way. That's what you're doing. I mean, I'll lower the desk. Are local authorities allowed to make it deliberately difficult for you to apply for SMI exemption? I live in Cornwall and there's nowhere on their website to make an application for this. Or if there is, it's very well hidden. Look, I mean, I first launched my severe mental impairment campaign. I think it's over a decade ago. And we basically cold called councils to ask about it. And half of the staff back then hadn't heard of the discount. So I think things have improved, but nowhere near enough, which is why we've requested this sort of standardised leaflets, standardised application form that should go on every council and that will be coming in from next April.

43:33Martin Lewis:I mean, just to put this in context, this week, separately, the carers discount on council tax. We did a spot check of pretty much every council about three months ago and found that one in five councils in England had incorrect information, misleading information about the council. allowance, 69 councils. And they were basically missing out. They hadn't updated their data until since it was, I think it was about 2013 when the rules changed. So all the lists of who could qualify, they were just missing lots of the major categories. They have now on the back of us publicising it and writing to every council, fix that.

44:06Martin Lewis:That's my money saving expert team. I think they deserve the credit for that. Brilliant Kit did all the work. Well done, Kit. You're a star on that. And we've got them all to change it. But there's still many people who've gone and read those websites and had correct information. This is commonplace. What I would say is, yes, go onto your council's websites to look at the discounts, but it is worth looking at other independent sources too, because council websites and council forms are not all of them are good enough. Simple as that. That's why I do the campaigning. OK. Do you want to talk about council tax support?

44:35Martin Lewis:I do. This is so important. Up to 2.25 million people on lower incomes are missing out on council tax support, worth up to£1 ,500. pounds. This is separate from discounts. Every council runs its own council tax reduction scheme. So what you get depends on where you live. There is no standardised definition and there's no standardised amount that you get reduced. Some councils will cut your bill by up to 100%. It is a jungle of variation. So it really depends on each council. Now, the biggest mistake people make about this is they think, if I'm eligible for universal credit, which is the catch-all national benefit, then I'll get my council tax support.

45:21Martin Lewis:They are totally separate systems. You have to apply for council tax support separately. The people who are likely to get it are those people who are on universal credit or pension credit, but you won't get it automatically. And that's why so many people miss out. In England and Wales, gov.uk will show you your council's details, and then you can then go to it and apply. In Scotland, mygov.scotland. You may be asked to provide evidence. For example, if you've got a low household income, you might need to prove your identity, your rental, your mortgage payments, your income and savings. But I think if you're generally somebody who's on universal credit and on a lower income, you should check out your council's criteria for council tax support.

46:01Martin Lewis:I mean, two and a quarter million people are likely, it's impossible to say because it's council by council, missing out on that. And it can be big money. Okay. Have we got time for a question? Let's do that. Yeah, go on very quickly. Claire, my daughter and I are both low income and get universal credit. I've asked my local councillor if we're entitled to a discount, but not heard back. What should I do? Get in touch with them and persevere. I'll do a couple more questions on that, because I know we've got more of that when we do the pod only, but we should probably play this right now.

46:35Martin Lewis:Adrian, you got it wrong last week, which means the score stands that you've got 19 right and 38 wrong in this three-option multiple-choice quiz, which means I'm afraid you're back to... N-B-R-C. No better than random chance. But let's get on with it. Now, everybody, our Adrian was stopped in the street by a very attractive woman. She said to him, You're Adrian Childs, aren't you? For one glorious moment, he thinks this is how James Bond must feel. He lifts an eyebrow and says in his smoothest West Midlands spy voice, Yes, the name's Childs. Adrian Childs. Could you just do that for us? The name's Childs.

47:16Adrian Childs.

47:17Martin Lewis:Marvellous. I thought so, she says. You do that podcast with Martin, don't you? Can you ask him something? I've been saving into a Lysa, but I've just inherited some money. I want to buy a house. I don't need a mortgage anymore. Can I still use my Lysa? Uh-oh, says Adrian, slightly deflated, but styling it out. You don't need Martin Lewis. I'm here. So, Adrian, what we want to know is what did you answer? And we want the correct answer at all. She wants to use her lifetime ISA she's been saving into as a first-time buyer, which you get a 25 % bonus on on buying a qualifying property under£450 ,000 without a mortgage.

47:56Martin Lewis:Is it A, no, you can't do it without paying the withdrawal penalty. B, yes, but you won't get the 25 % bonus. C, yes, and you can get the 25 % bonus. Do you understand the question? Yes, I do. Have you given me all available information, all the necessary information? The question is, she wants to buy a first-time property using a lifetime ISA, but she doesn't need a mortgage. She's just going to buy it outright. Can she get the 25 % bonus that's been added to a lifetime ISA and use it towards a mortgage? So, A, no, she'd have to pay a withdrawal penalty, which would take that bonus off effectively.

48:34Martin Lewis:OK, but she doesn't need a mortgage. She doesn't, and she's not getting a mortgage. And this is her first property? First property. And the property's worth how much? Under£450 ,000. So it's worth£412 ,713.12. Under£450 ,000. So it qualifies in every other way. The question is, does the fact she's not getting a mortgage invalidate it? So A, no. B, yeah, she won't get the 25 % bonus, but she'll get her money back. C, because remember, the withdrawal penalty means you get back less than you put in. B, basically you get back what she put in, or C, she will get the bonus. Well, obviously, as usual, I haven't been concentrating hard enough.

49:11Martin Lewis:We have talked about this in the programme before. I know we have, but I don't remember the mortgage. Why would the mortgage be here or there on this? Because it's to help you get the mortgage. I would hope, logic would say it's C, I think it's B. So you're going to say yes, but she just won't get the 25 % bonus? Yeah. Well, it's not B You've locked in So let's have an uh-uh straight away Because we're rushing And I'm afraid she won't get the bonus at all The answer here is the lifetime ISA To get it, you have to be doing it When you are getting a mortgage on a property And I presume the original reason Well, why can't you just get a five grand mortgage then?

49:53Martin Lewis:Well, it's quite difficult to get a five grand mortgage That's what you'd have to do You would have to go and mortgage a part of the property in order to get the bonus. Whether that's worth it or not for you depends on the terms of the mortgage. But if you'd saved a lot in a life, so if you'd been maxing it out and had sort of six or seven grand worth of free money, it could well be worth getting a mortgage. I'm not sure you're going to get one for five grand though. You're going to need to get one for bigger than that and it's going to be a hassle. But the rules are effectively because the lifetime ISA was brought in to help those people get on the housing ladder who couldn't afford to.

50:18Martin Lewis:Clearly, if you don't need a mortgage and you've got the cash, you can afford to and therefore it wasn't set up to be able to help you. So lifetime ISAs do require you to get a mortgage for you to be able to use them. So hands up, when I was having a quick listen to the podcast to review it afterwards, I listened to my answer and didn't think I was clear enough, so I just wanted to add a couple of notes here. The correct answer in Money Mastermind was answer A, you'd pair withdrawal penalty. And this is really important. The rules on LISAs are plain. You only get the 25 % bonus if you're buying a qualifying property under qualifying rules, which means you have a non-buy-to-let mortgage for a UK residential property that costs under£450 ,000.

51:03Martin Lewis:Or you take the money out once you're age over 60. If you take money out for any other reason, you would have to pay a withdrawal penalty. Now, the withdrawal penalty is 25%, and this can get a little confusing. The bonus is 25%, and that is automatically added each month, and the withdrawal penalty is 25%, which some people wrongly assume means you get back what you put in. Unfortunately, the maths doesn't work like that because if you have, say,£10 ,000 and you get a 25 % bonus, you've now got£12 ,500. If you have a 25 % penalty on that, that's 25 % off a bigger number because£12 ,500 is bigger than£10 ,000.

51:46Martin Lewis:And the net result is you're actually 6.25 % down. so you would only withdraw£9 ,375. Therefore, in the case of someone not needing a mortgage, their only choice if they want to keep the money is either get a mortgage, as Adrian suggested, or wait until age 60. If they just want to take the money out, they would pay a penalty on it. Now, that's not the most common scenario. The most common scenario and the biggest problem with the lifetime ISA is for those people who've been saving up to buy a home home and then the home that they're buying costs a little bit over£450 ,000. And then even though they have done everything right, they've got a mortgage, they've saved up for a property using a lifetime ISA, their first-time buyers, they still, if they want to take their money out, which they probably will because they've been using it as their place to save for first-time property, have to pay that 6.25 % penalty.

52:37Martin Lewis:I hope that clears it up.

52:42Martin Lewis:Hello now and welcome to the pod only bit. I'm here with PPS, podcast producer Simon. Hello Simon, how are you doing? I'm excellent. I would like, because of my slight pun disease, I would just like a little bit of credit that we've been talking about being in the wrong band the whole time. And I haven't mentioned Robbie, I haven't mentioned Jerry, I haven't mentioned Zane. I did not do that pun at any point. and I think I should be somewhat credited for my fantastic restraint over that. Admirable, yes. Admirable. But we do have some more council tax questions and stuff to talk about so we'll move away from the puns and get straight into them.

53:22Martin Lewis:I think there was one more we had left on council tax support. Yeah, a really interesting one actually from Daryl. Any idea what's happening with people who were bumped over to universal credit from legacy benefits like ESA and then found the transitional protection didn't include council tax support. Mine went up 25%. Yeah, this is a really interesting question. So for those who don't know, if you were on the old form of benefits like tax credits or others, you were moved over an income support and etc. You were moved over to universal credit. And if you agree to do it in the right way, then you've got transitional protection, which said for a limited time, your income would not drop.

53:58Martin Lewis:So you would get the same amount of income, even if you're going to a new system where ultimately you would be getting less on universal credit. But there was an interaction of that with the way that council support works in some councils, remembering every council is doing this differently, both its eligibility criteria, what it counts as income, and what it is paying out. So what is likely to have happened here is that even though transitional protection meant that you got the same total income under the new system with universal credit as you did under the legacy benefit system, because what's likely to have happened is you then got a lower universal credit payment plus a top-up income in the form of a transitional payment, the council counts those incomes differently to the way it did before when it would only count a certain amount of universal credit up.

54:49Martin Lewis:And without just going, it gets incredibly complicated. But basically, that meant that the council said you weren't entitled to the same support. I mean, it's crackers, but that's just how it works. I don't know what to say. I mean, these things, I think I've made my frustration with the council tax system pretty plain. I mean, again, the fact that council tax support is very so widely in every council and is a postcode lottery is another part of this broken system.

55:18Martin Lewis:What else have we got, Simon? Well, so I think you said we're going to do five council tax savings. We've only actually done three so far. That's a very good point. I do have two left. Don't worry. I was not getting my numbers wrong. So I'll just, these are the quick ones I'll add in now. We haven't had any questions on them because they tend not to be things that people know about. From Freedom of Information request, the last one I did was in 2024 on this. Local authorities across Britain were sitting on£140 million of overpaid council tax. Now you're most likely to be able to claim if you've moved out of the council area since 1993, it goes back all that time, and you weren't paying by direct debit.

55:57Martin Lewis:Effectively, it means that you're entitled to a refund back, but you never got your refund and there's£140 million of it. So the first option is check if your old council offers an easy online claim form. This is the best way. Just do a search for council name, whatever your council name is, council tax refund firm. About half the time, this will take you to an online claims firm and a page explaining your council's process. If not, you can email your council or call them, but generally email's better. If you don't have enough details, if the form is off-putting along, you can try and check just to see.

56:29Martin Lewis:So again, if you moved out of your council area, so you moved to a different council area and you weren't paying by direct debit and you moved sort of midway between your payment year, you may be owed some money back and that's all you're looking to check and do. So that's a simple one. And then my final one, which is probably a cheat in my five ways to save on council tax, is just, it's that, we talked about this before, but it was worth putting in because I'm very pleased about it. English council tax is changing from next April. We've already mentioned the severe cognitive impairment change for SMI.

57:05Martin Lewis:The other big change is about the process on council tax debt collection, which you will have heard if you're regular listeners me talk about many times before as being the most aggressive, punitive, vicious and counterproductive form of mainstream debt collection. Councils are allowed to do things that no commercial company would be allowed to do that would fail in the FCA's treatment of how consumers should be treated if a commercial lender were doing it. And we have managed to mitigate that somewhat. This is a campaign I did with my Money and Mental Health Policy Institute charity. I did it first by meeting Angela Rayner, who I have to tell you, I have loads of these meetings and normally what you get from a politician is a nod and a smile.

57:45Martin Lewis:But what she said at the end is, yeah, we should sort that. And I thought, well, we'll see if you do. But then they put out a consultation pretty quickly and Steve Reid, her successor, has followed that up. So thanks to him as well for listening here. There's no party political point, just in case this is a podcast that's going out. I know we're in the middle of this political turmoil with lots of different names being mentioned. I am staying strictly neutral. I'm just telling you a story of something that happened in the past. So anyway, those changes are now confirmed to come in from April 2027, and here is what's happening.

58:14Martin Lewis:Currently, if you miss your monthly payment on council tax, within just three weeks, you can be asked to pay for the entire year. As I've said before, no idea how people who miss a monthly payment are expected to be able to afford to pay for an entire year's payment. And within three weeks of that, the council could apply to court and send bailiffs in and add administrative costs on top. So the big changes here are, first of all, instead of three weeks, in which after three weeks they can change from a month to a year, they will have to wait 63 days, which is roughly the same amount of time as breathing space and debt collection.

58:52Martin Lewis:They should also be signposting you to where you can go and get money help. And hopefully that will give you a little bit of a time to go and talk, to get help and to sort out how to pay the council tax so you don't progress to that bailiff stage. And if you do go to the bailiff stage, there will be a limit on the extra cost that can be added on top of£100. Now, look, I need to be honest with you, I would have liked that delay to be a lot longer. I would have liked the£100 to be a lot shorter. But this is still a big improvement. Final note of a change that's going to be coming from next year in council tax, as we're talking all things council tax, is that currently the default on most councils in England anyway is asking for payments from April to January, 10 monthly payments.

59:30Martin Lewis:Though you do have a right to ask for it to be done in 12 monthly payments. From April 2027 for new bills and for the following year for all bills, the default will be shifted to 12 monthly council tax payments. It won't change what you pay, it just changes how you pay, which makes more sense 12 monthly. But one of the things I lobbied on there is you should still have the right to be able to request for 10 monthly payments, stick on the current system, because I know some people like that because they say to me, yeah, but then I use those extra two months to pay for my car insurance. So it's a good way, it helps me budget.

1:00:02Martin Lewis:So you will still be able to do that. So those are my final fifth way to save on council tax was a little bit of a cheat, but I wanted to talk to you all about it anyway. And I think that's probably enough. I think, Simon, shall we stop there? Oh, you've nailed it. Yeah, done.

1:00:19Martin Lewis:So as we've just said, that is it for this week. We tend to put out a new episode every Thursday and Monday. The Monday one is the Question Time podcast, where you can ask me absolutely anything and everything, open brackets, within reason, close brackets. If you've enjoyed today's pod, please subscribe. And why not tell your friends you've been listening to the Martin Lewis podcast? After all, they might listen. They might realise they're in the wrong council tax ban. They might get back six or seven grand. Surely then they owe you at least a drink. You never know. After all, think about the rewards and joy you could get from saving your friends money.

1:00:53Martin Lewis:And if you haven't enjoyed it, but for some reason you have been listening all this way through into the podcast. Pfft. Just pfft.

1:01:20Martin Lewis is the founder of MoneySavingExpert.com But of course, other consumer and price comparison websites are available. You can get in touch with Martin's podcast production team by emailing martinlewispodcast at bbc.co.uk. The offers and rates mentioned in the podcast are correct at the time of recording. However, if you are listening on demand, it's worth double checking as details can date. Remember to subscribe on BBC Sounds and leave us a review however you listen.