Amid the worst financial crisis in recent history, the disparity of living standards between the most affluent regions and those that aren’t so fortunate has been uncovered.
With millions affected by the recent financial crashes, furlough schemes and sky-rocketing unemployment rates, a new spike in council tax for many regions threatens to worsen this situation – as high as 7.5 percent in some areas.
Campaigners are currently pushing for a reform of the current council tax system as they suggest the lowest earners in the poorest areas are penalised greater.
This follows the government’s announcement that sees households across England and Wales will have to pay an additional £1.8 billion in council tax over the 2021/22 tax year – an average of £100 rise per household.
Specialist mortgage platform Haysto has conducted a study outlining what areas of Great Britain face the highest council tax rates in proportion to their annual income.
Westminster tops the charts, boasting an impressive Council Tax percentage rate of 1.4 percent – thanks to the region’s huge average annual salary that’s well clear of £60,000.
It may be surprising to see London Boroughs dominate the top 10. With annual salaries averaging well over £40,000, the top ten will generally never spend more than three percent of their salary on Council Tax, despite the average house price in London reaching almost £680,000.
| Ranking | Area Name | Country | Avg Council Tax per Dwelling (£) | Avg Annual Pay (£) | Council Tax as a Percentage of Annual Pay |
| 1 | Westminster | England | 892 | 63,791 | 1.40% |
| 2 | Wandsworth | England | 789 | 55,313 | 1.43% |
| 3 | Hammersmith and Fulham | England | 1,098 | 53,130 | 2.07% |
| 4 | Tower Hamlets | England | 1,156 | 49,500 | 2.34% |
| 5 | Southwark | England | 1,167 | 44,337 | 2.63% |
| 6 | Islington | England | 1,215 | 45,929 | 2.65% |
| 7 | Hackney | England | 1,020 | 38,419 | 2.65% |
| 8 | Greenwich | England | 1,149 | 43,261 | 2.66% |
| 9 | Camden | England | 1,419 | 51,778 | 2.74% |
| 10 | Lambeth | England | 1,246 | 44,733 | 2.79% |
Scotland falls short of the top 10, with Na h-Eileanan Siar ranking 17th overall as residents have to pay 3.33 percent of their annual salary on Council Tax.
At the other end of the scale, it’s a different picture. The percentage Council Tax rate in proportion to annual income more than triples.
With a percentage Council Tax rate three times the average of London boroughs – and more than double that of major English cities like Birmingham and Manchester – it’s evident that income disparities are taking their toll in the less affluent areas of England and Wales.
The Yorkshire Dales district of Richmondshire in particular has its fiscal concerns. Worryingly, its citizens hand over nearly eight percent of their income to Council Tax on average, in addition to the already-rising cost of living.
| Ranking | Area Name | Country | Avg Council Tax per Dwelling (£) | Avg Annual Pay (£) | Council Tax as a Percentage of Annual Pay |
| 355 | Richmondshire | England | 1,864 | 23,750 | 7.85% |
| 354 | South Hams | England | 1,805 | 24,354 | 7.41% |
| 353 | Gwynedd | Wales | 1,745 | 24,221 | 7.20% |
| 352 | Powys | Wales | 1,731 | 24,244 | 7.14% |
| 351 | North Devon | England | 1,567 | 22,025 | 7.11% |
| 350 | East Devon | England | 1,777 | 25,533 | 6.96% |
| 349 | Teignbridge | England | 1,636 | 23,932 | 6.84% |
| 348 | Denbighshire | Wales | 1,643 | 24,041 | 6.83% |
| 347 | Ceredigion | Wales | 1,647 | 24,412 | 6.75% |
| 346 | Rutland | England | 2,050 | 30,402 | 6.74% |
| 345 | Melton | England | 1,648 | 24,573 | 6.71% |
Interestingly, outside of London, it’s the northwest and northeast of England that offer some of the fairer Council Tax rates in relation to earnings.
Major cities in England like Manchester, Birmingham and Liverpool show they offer reasonable Council Tax rates, despite presenting an average income of around £28,000 a year.
Paying around one percent more of their average salary while earning only a little more than the average Welsh citizen (£26,805) shows these cities are getting a fairer deal.
These Council Tax percentages even rival that of the most affluent London boroughs, despite an average wage that’s more than half of the area.
| Which parts of England (outside of London) pay the lowest council tax proportionately? | ||
| Area Name | Council Tax as a Percentage of Average Annual Pay | Overall Ranking |
| Manchester | 3.56% | 20th |
| Stoke-on-Trent | 3.58% | 22ⁿᵈ |
| Liverpool | 3.65% | 25th |
| Birmingham | 3.66% | 26th |
| Copeland | 3.67% | 27th |
Paul Coss, Specialist Mortgage Broker and Co-Founder of Haysto commented:
“What’s shocking here is the disparity in Council Tax percentages paid out by people across the country. With people paying nearly 10 percent of their annual salary, on top of existing bills and a rising cost of living, it’s something that needs to be addressed.
“Many campaigners are pushing for the current Council Tax to be overhauled as it’s deemed outdated for using house prices from over 30 years ago. Instead, it should be based on today’s property values and homeowners’ ability to pay – especially amid such a crushing economic downturn”.
The complete data set can be viewed here.