A little-known council tax discount could save people thousands of pounds this year, as their bills are set to rise from this month.

The “very obscure” discount was highlighted by Money Saving Expert Martin Lewis last year.

He told viewers of his Martin Lewis Money Show Live on ITV that the discount was so “undercover” that even some councils don’t know it exists.

The Severe Mental Impairment (SMI) council tax discount could reduce a households council tax bill by 25% a year, with Mr Lewis advising viewers that at least 100,000 eligible people are currently missing out on the discount.

Mr Lewis said: "There are qualifications you have to go through [to claim it] then you may be eligible to be discounted for council tax purposes.

"Now what that means is, let's imagine it was me, and me and Angelica were a couple living together.

"I've got SMI, so Angelica is the only adult in the household who is eligible to pay council tax, so you are going to get the 25% single person's discount. It can be backdated, and some people get thousands of pounds.

"It is so undercovered that some offices when you call them up don't even know it exists.

"If you think you know anyone in that position look up the Severe Mental Impairment council tax discount and there are probably 100,000 people out there missing out."

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What you need to do in order to claim the discount differs depending on whether you are in England and Scotland or in Wales.

In England and Scotland, you will need to get a claim form from your council, a doctor’s diagnosis and some supporting evidence to accompany the form.

While in Wales you can print the application form from the Welsh Government website before getting a doctor’s diagnosis and sending your form to your local council tax office.

When your claim is accepted, the discount should be applied automatically each year, meaning you will not need to reapply.