Somerset Council Tax Reduction Savings Limit: The £6,000 Capital Rule

Somerset Council's £6,000 savings cap is an absolute cut-off. If your total household capital exceeds £6,000 — even by a single pound — you receive zero Council Tax Reduction, regardless of how low your income is.

How the Cap Works

Unlike Housing Benefit or the old council tax benefit system, Somerset's income-banded CTR scheme doesn't use tariff income calculations where a small amount of assumed income is added for every £250 of savings above a lower threshold. There's no taper. It's binary: under £6,000, your savings are completely ignored in the income assessment. At £6,001, you're out of the scheme entirely.

This means there's no gradual reduction. A person with £5,999 in savings and a £100/week income gets the full Band 1 (100%) discount. The same person with £6,001 gets nothing.

What Counts Toward the £6,000

The council's definition of "capital" includes:

• Bank account balances — current accounts, savings accounts, and any other deposit accounts
• Building society accounts
• Cash ISAs and investment ISAs
• Shares and unit trusts
• Secondary property or land (other than your main home)
• Lump-sum payments held in any account

The capital assessment looks at the combined resources of you and your partner. If you're a couple, the council adds up everything both of you hold.

What Doesn't Count

Your main home is excluded — its value doesn't count toward the £6,000. Other typical exclusions include:

• The property you live in — your main residence
• Personal possessions — furniture, vehicles, clothing
• Business assets and compensation payments can raise fact-specific questions. Do not assume they are excluded; ask Somerset Council whether a particular asset or payment counts.

The Bank Statement Requirement

Somerset Council verifies your capital through the mandatory bank statement evidence. When you apply, you must provide two full, consecutive monthly statements for every account you and your partner hold. Not summaries, not screenshots — full statements showing every transaction and running balances.

If your balances have moved above and below £6,000, give the council a complete picture and ask which date or period it uses. Do not assume that a brief spike or a low balance on the application date determines the decision by itself.

The Pension-Age Difference

If you've reached State Pension age, the national rules apply instead of Somerset's local scheme. The pension-age capital limit is £16,000 — significantly more generous — and there's a tariff income calculation for savings between £10,000 and £16,000 rather than a hard cliff edge. If you receive Guarantee Pension Credit, capital is fully disregarded with no upper limit.

Planning Around the Limit

If your savings are close to £6,000, provide complete and accurate information about your capital. Do not move or hide money to make it appear lower; keep records of ordinary spending.

The legitimate approach: if you're using savings to pay debts or essential costs, those expenditures naturally reduce your capital. Keep records of what the money was spent on.

Our Somerset Council Tax Reduction guide includes a capital assessment worksheet that helps you identify what counts toward the £6,000 limit and what's excluded, so you know where you stand before you apply.

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