The Money Saving Expert has highlighted a “very obscure” council tax discount that could save people thousands.

Martin Lewis raised the SMI discount on his ITV show, saying the discount is so unknown even some councils don’t know it exists.

The Severe Mental Impairment (SMI) council tax discount could reduce a households council tax bill by 25pc a year, with Mr Lewis saying 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 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 25pc single-person's discount. It can be backdated and some people get thousands of pounds.

"It is so undercovered that some offices 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."

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

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

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