Cutting household bills

Household bills are the fixed costs that leave your account whether or not you have checked them lately, and several of them can be cut without changing how you live. The three biggest regular bills most people can act on are energy, Council Tax and the TV licence. On energy, switching supplier or tariff is free, takes about three weeks in total including the cooling-off period, and your supply never stops. On Council Tax, a single person gets 25% off their bill, some households get 50% off or pay nothing at all, and anyone can ask to spread payments over 12 months instead of the usual 10¹.

The TV licence is the odd one out: it costs £169.50 for 12 months, but you only need one if you watch or record live TV or use BBC iPlayer, and some people pay half or nothing at all². If money is already tight, the most important thing to know is that Council Tax and the TV licence are priority bills. Falling behind on them carries consequences that falling behind on a credit card does not, so they are paid first, and free help exists if you cannot pay them³.

Where household bills can be cut: energy, Council Tax and the TV licence

The bills worth attacking first are the ones with a rule that can be applied or a market you can switch in. Energy has both: you can switch supplier or tariff, and you can check whether you are on the cheapest payment method. Council Tax has a set of discounts, exemptions and reductions that many people never claim, and the bill itself can be challenged if your home is in the wrong band. The TV licence has a narrower set of options, but they include a 50% reduction for people who are registered blind and a free licence for people over 75 who get Pension Credit².

Reduced rates and social tariffs also exist on water, gas, electric and broadband bills for people on low incomes, and it is worth checking these alongside the discounts described below⁸. Help may also be available from energy company schemes, benefits, charitable grants or your local council⁹.

Council Tax itself is a tax on homes in a council's area, collected since 1993 under the Local Government Finance Act 1992. Most people aged 18 or over who own, rent or live in a home must pay it, and it is not a contract you sign up to¹⁰. Your bill is worked out from the valuation band for your home, how much your local council charges for that band, and whether any discount, reduction or exemption applies¹¹. The amount you pay depends on the value of your house, your age, your income and who else lives with you, which is why two neighbours in identical houses can pay very different amounts⁴.

If you rent, your tenancy agreement may say the rent includes Council Tax, but a landlord cannot require you to make a separate additional payment to them for Council Tax or a TV licence¹². Renters can reduce their Council Tax in two ways: a discount, and council tax support, also called Council Tax Reduction¹³.

Switching energy supplier or tariff

Switching energy supplier means moving who sells you gas and electricity; switching tariff means changing the deal you are on, sometimes with the same supplier. You could save money by switching supplier, switching billing method, or switching tariff, and it may work out cheaper if you have both gas and electricity from the same supplier¹. The switch itself is free: the same pipes, wires and meters are used, and your supply does not stop at any point.

The process runs to a fixed timetable. When you agree a new deal, a 14-day cooling-off period starts, during which you can change your mind. The switch should then complete within 5 days of the cooling-off period ending⁵. Before 1 April 2024, suppliers had 15 working days to complete a switch, so the current arrangement is considerably quicker¹⁴. If you are moving home rather than switching at the same address, tell your energy supplier at least 48 hours in advance, and ideally more⁹.

When the switch finishes, your old supplier sends a final bill. If you owed money, the debt is added to it; if you were in credit, the supplier must refund the credit balance within 10 working days of that final bill⁵. Some tariffs require one month's payment, or in some cases two, before they start supplying your gas and electricity, so check what you are being asked to pay upfront⁹.

Choosing between tariffs means looking at two parts of the price: the unit rate, what you pay for each unit of gas or electricity you use, and the standing charge, a fixed daily amount. Standing charges have become a larger share of many bills, and some tariffs reduce or remove them, though one prepayment tariff with no standing charge instead charges a much higher unit rate for the first 2kWh of gas or electricity you use each day¹⁵. A tariff that looks cheaper on the standing charge can cost more overall if you use little energy, and the reverse can be true if you use a lot.

Fixed tariffs lock your rate for an agreed term, usually 12 to 24 months¹⁴. From 1 April 2026 the government removed some costs from energy bills in England, lowering the amount paid; this was a one-off change, not related to the energy price cap, and suppliers applied the lower prices automatically. If you had already fixed a deal, your rates were cut on 1 April under the same change¹⁶. The reductions are made under schemes that reduce the amount charged for domestic electricity or gas supply by licensed suppliers¹⁷. A green tariff works by the supplier matching the amount of energy you use to a renewable source; the gas or electricity arriving at your home is the same as everyone else gets¹⁸.

Exit fees, debts and other limits on switching energy

Two things can block or complicate a switch: exit fees on your current deal and debt to your current supplier.

Fixed tariffs usually run for 12 to 24 months, and leaving one early can mean paying an exit fee, so check your terms before switching mid-term¹⁴. Not every fixed deal has one, and the fee, if there is one, is set out in your tariff's terms and conditions¹.

Debt is the more common barrier. If you owe money to your energy supplier, a new supplier may not accept you¹. The rules differ by payment method:

• If you pay by direct debit or when you receive a bill, you can still switch if you have owed your supplier money for less than 28 days. Your debt is added to your final bill⁹.
• If you have a prepayment meter, you can switch supplier and tariff as long as you have less than £500 of debt on your meter. Smaller providers may have different limits¹⁹.

If you are in arrears and cannot switch, it is still worth speaking to your supplier: they can check the charges are correct and help work out a solution such as a payment arrangement²⁰. You can also apply for support from the government or your local council, cut down your energy costs, or apply for grants and funds from charities or energy companies²⁰.

Renters sometimes worry a landlord can object. A landlord cannot take money from your deposit for changing supplier, except for small administrative costs to change the supplier back, and those costs must be agreed and shown in your contract²¹.

Once you have agreed a new deal, you get the 14-day cooling-off period. Under the rules that govern this right, by exercising a right to cancel, the consumer withdraws from the contract and the contract is terminated²². After those 14 days you can no longer simply change your mind, though nothing stops you starting another switch later.

Comparing energy tariffs in Northern Ireland

The energy market in Northern Ireland works differently from Great Britain, and the comparison sites used in England, Scotland and Wales do not cover it. To compare tariffs you need the Consumer Council website, which has an electricity price comparison tool showing whether there is a cheaper or more suitable provider available to you²¹. As in Great Britain, you could save money by switching supplier, switching billing method, or switching tariff²³.

The Consumer Council also tracks prices over time through its Home Energy Index, which follows household gas, electricity and home heating oil prices in Northern Ireland. It records gas and electricity tariffs every month and home heating oil prices every week, so it shows both the level of prices and the direction they are moving²⁴. Home heating oil matters in Northern Ireland because many homes outside the gas network rely on it.

Council Tax discounts: 25% off if you live alone

The single most common Council Tax saving is the single person discount. If you live alone, you are entitled to 25% off your instalments¹. The same 25% applies if you are the only person living in your home, or if all the other residents are disregarded for Council Tax purposes²⁵. You may qualify if you are the only adult in your home, or if you live with adults who are exempt²⁶.

The discount is not applied automatically in every case: you need to tell the council you live alone, and they may check your circumstances. If your household changes, for example an adult child moves in, the discount ends and the council can ask for money back, so it is worth telling them promptly.

Beyond the single person discount, the main reduction for people on low incomes is Council Tax Reduction, which you may be able to get if you are on a low income or get benefits¹¹. It used to be called Council Tax Support. Your local authority can provide advice for Housing Benefit and Council Tax Reduction claims, and in Wales you can apply by contacting the council's Council Tax department, over the phone, online through the council's website, or as part of a Universal Credit claim, with some councils providing a hard copy form on request²⁷.

Council Tax exemptions and people who are not counted

Council Tax bills assume two adults live in the home. People who are not counted, or "disregarded", reduce the bill even when they are physically living there. Full-time students, some carers, and people with a severe mental impairment do not count towards your Council Tax bill²⁸. If everyone in the home is disregarded, the bill is halved: if all residents, including yourself, are not counted for Council Tax purposes, you may get a 50% discount²⁹. If no one is eligible for Council Tax at all, there may be a 50% discount³⁰.

Some homes are exempt from Council Tax altogether. A home where the only people living there are severely mentally impaired is exempt³⁰. A self-contained annexe with a dependent relative living there is also exempt where the relative is 65 or over and disabled, though only the annexe is exempt, not the main house³¹.

Students have their own rules. Most full-time students should not have to pay Council Tax, but there are exceptions, such as a sole owner or sole tenant living with a non-student adult who is not their partner³². Full-time students do not pay Council Tax unless they have other non-student adults living with them³³. Part-time students do need to pay, though they may get a discount or a Council Tax Reduction depending on their income³³.

There is also a reduction for households where someone has a disability. Under the Disabled Band Reduction Scheme, the council charges Council Tax on a lower valuation band than the one the property is in, for example from band E to band D²⁸. If the home is already in the lowest band, band A, the bill is reduced by one sixth instead²⁵.

Challenging your Council Tax band or bill

Your Council Tax band is based on what your home was worth at valuation, and if you think your home is in the wrong band you can challenge it¹¹. In Scotland, you challenge your band through the Scottish Assessors website³⁴.

There are two routes in England and Wales, and which one applies to you depends on your situation:

• Proposals: you can make a proposal if you have been paying Council Tax on your property for less than six months, if the Valuation Office Agency has changed your band in the last six months, or if there has been a physical change to your local area. You can also make a proposal if you want to remove a property from the Council Tax list³⁵.
• Challenges: in other cases you can ask the VOA to check your band. Once you have gathered your evidence, you submit your challenge through the online service, or by email or letter³⁵.

Before challenging, compare your band with similar homes nearby and check what your local council charges for that band¹¹. A successful challenge means the band, and the bill, go down, and arrears can be refunded. An unsuccessful one carries no penalty, but note that a band can be moved up as well as down if the assessor thinks the original banding was too low.

Bands are not frozen forever. In Scotland, new high value bands are being introduced from 1 April 2028: band I for properties valued between £1 million and £2 million, and band J for properties valued above £2 million, with fewer than one per cent of households affected³⁶.

Spreading Council Tax over 12 months instead of 10

Councils send Council Tax bills in March for the financial year that begins in April⁴. The cost is usually split into 10 monthly payments³⁴, which means no instalments in February and March but bigger payments in the months that are charged. You can choose to spread your payments over 12 months instead of the usual 10, which reduces the amount you are asked to pay each month⁷. You can ask the council to pay in 12 monthly payments and they must allow this if you ask⁴.

In Scotland you may also be able to pay smaller amounts every week or every 2 weeks³⁴. Councils elsewhere may agree similar arrangements if you cannot manage the standard instalments; they may agree to spread payments over 12 months so each payment is reduced³¹.

One timing trap is worth knowing. If your bill arrives later than April, which can happen if you move house, you have less time to pay, and the bill must be paid in full before the end of the financial year in March⁴.

TV licence: when you need one and who pays less

A TV licence is needed to watch or record live TV on any channel, including through services like Sky and BT, and to watch programmes on BBC iPlayer. This applies whatever device you use: it covers watching TV on your phone, tablet or computer as well as a television set⁶. You do not need a licence if you never watch live television, never use BBC iPlayer, and only download, watch on demand or catch up programmes from services other than the BBC⁶.

The licence costs £169.50 for 12 months². There are different ways of paying: weekly, monthly, quarterly or annually, by cash, Direct Debit, debit or credit card or by post⁶. When budgeting, divide the cost of the licence by 12 and include that amount in your monthly budget¹.

Several groups pay less or nothing:

• People who are registered blind or severely sight impaired get a 50% reduction in the cost of their TV licence, regardless of age, with appropriate evidence. The licence must be in that person's name, and the discount can also apply if you live with someone who is registered blind³⁷.
• People aged 75 or over can apply for a free TV licence if they or their partner gets Pension Credit³⁸. If you already get Pension Credit, you can apply when you reach 74³⁷. People over 75 in residential care or sheltered accommodation may also qualify for a free TV licence³⁹.
• Care home residents who are not entitled to a free licence may be able to get a discounted licence if their care home qualifies for an Accommodation for Residential Care (ARC) Concessionary TV Licence³⁷.

If you are behind with TV licence payments, TV Licensing has a Simple Payment Plan, a way to manage your payments, change when you pay and pay off what you owe⁶. Coming to an arrangement matters, because you can be fined for not having a licence¹.

Council Tax and the TV licence are priority bills: what happens if you fall behind

Not all bills are equal when money runs short. Council Tax is a priority bill, which means you need to pay it before other bills²⁶, and the same applies in Scotland, where mygov.scot states plainly that Council Tax is a priority debt⁴⁰. Priority debts include Council Tax, the TV licence, child maintenance, income tax, fuel bills, mortgage or rent⁴¹. The reason is what non-payment can lead to: if you do not pay priority debts you could lose your home, be disconnected from an essential supply such as gas or electricity, or be sent to prison³².

The TV licence is a priority for its own reason: TV Licensing has strong powers to make you pay, and you may get a criminal magistrates' court fine³². In Scotland, paying for your TV licence is a priority because you can be fined in the sheriff court for not having a licence¹. The fine can be up to £1,000 plus court costs⁶.

Council Tax arrears escalate quickly. If you miss an instalment, the council sends a reminder notice, and if you do not pay within 7 days you have to pay the whole year's Council Tax instead⁷. From there the council can take enforcement action, and if the debt is for £1,000 or more, the council can apply to the County Court for a legal charge on the home you own²⁹.

If you cannot pay, the first step is to contact the council before the arrears build up. Councils can let you pay your Council Tax in smaller amounts⁴⁰. Check whether you can claim Council Tax Reduction, and include any reduction you get in your budget¹. Free debt advice is available from charities including StepChange and National Debtline, and help may also be available from energy company schemes, benefits, charitable grants or your local council⁹. If you are struggling with bills generally, the guides to making a budget and saving money on a low income cover where to start, and free money guidance lists the impartial services you can speak to at no cost.