APRIL will see some major money changes including increases to the National Living Wage and a benefit overhaul.
There are also several price increases coming into force in April, which will impact bills including Council Tax, energy and water.
If you’re watching your cash closely this is what you need to be aware of in April[/caption]
Here are all the big money changes you can expect to see in April and what they mean for you.
April 1 – National Living Wage increase
More than a million workers are set to get a bumper pay rise of £1,400 a year when the National Living Wage goes up on April 1.
The minimum earnings for workers in the UK who are aged 21 and over will rise by 6.7% from £11.44 to £12.21.
The National Living Wage is set by the Government each year and it usually rises each spring to keep in line with increasing prices.
It has generally risen by more than inflation in recent years.
The National Minimum Wage for 18 to 20-year-olds will also be increased from £8.60 to £10 an hour – a 16.3% rise.
April 1 – Energy price cap change
Millions of households will see their energy bills increase from April with the energy price cap rise.
Energy regulator Ofgem has confirmed that the average dual fuel bill for those not on a fixed deal will rise from its current level of £1,738 a year to £1,849.
This is an increase for the average household of £111 a year, or £9.25 a month.
It is the third consecutive quarter to see an energy price increase for around 22million households on standard variable tariffs (SVTs).
The figure is £159 per year higher than the price cap set for the same period last year, but £531 lower than at the height of the energy crisis in early 2023.
Customers on a fixed tariff will not be impacted by the price cap increase.
Ofgem has said 4million more customers have moved to a fixed tariff since its last price cap announcement in November, taking the total to 11million.
April 1 – Stamp duty increase
Higher stamp duty rates will come into force from April 1, meaning increased fees for those who have failed to complete house purchases before the March 31 deadline.
Before the rise, first-time buyers did not have to pay stamp duty on the first £450,000 of a property purchase.
But from April 1 the threshold beyond which they must pay the tax will plummet to £300,000.
The change could add thousands of pounds to the total cost of buying a home.
Regular buyers (who are not purchasing their first home) will also see the stamp duty threshold fall from £250,000 to £125,000.
The change means that those buying a property worth more than £250,000 will pay an additional £2,500 in stamp duty.
April 1 – Council tax bill increases
Millions of households across dozens of local authorities are set to face council tax increases of up to 15.6% this April.
The average council tax rise is expected to be 5%, but in 29 local authorities across the UK, residents could face increases of up to £213 a year.
The dramatic increases come after some councils were given permission to raise bills further.
Our interactive map will show how much bills are set to go up across your local authority.
In England, local authorities can increase council tax by up to 4.99% each April without holding a referendum.
Any increase above this limit requires a local referendum to gain public approval.
Councils in Scotland are not subject to such strict constraints and can implement larger increases without a referendum.
Councillors in Falkirk have approved the largest council tax increase in the UK, with residents facing rises of 15.6%.
April 1: TV licence bill increases
April’s bill increases will also see the price of a standard colour TV Licence rise from £169.50 to £174.50 a year.
The price of a black and white licence will also go up from £57 to £58.50.
For those paying monthly the increase will add £5 a month to the price of a colour licence or 42p a month for those with a black and white licence.
It has been confirmed that the BBC licence fee will continue to increase in line with inflation each year until 2027.
The household payment funds much of the BBC‘s operations and it can be paid monthly, quarterly or annually.
There are discounts available including for those over 75.
April 1: Car tax increases
And, many could also see increases to their car tax bills.
Rates of Vehicle Excise Duty (or car tax) will rise dramatically for the highest emitting motors, potentially leading to an increase of nearly £3,000.
From April 1, 2025, any car that emits more than 255g/km of CO2 will be required to pay an additional £2,745 to use the road.
This means some drivers could receive a significant hit, making their VED costs jump to a mind-boggling £5,490 for the first year.
The costly car supplement, for those with motors which cost more than £40,000 when new, is also set to rise to £425 per year, up from £410.
This additional fee is taken from the second to the sixth year your car is on the road.
And, for the first time drivers of electric and low-emission vehicles will pay car tax for the first time.
You’ll pay £10 for the first year and then the standard rate of £195 thereafter.
April 1: Water bill increases
Households in England and Wales will see their water bills increase from April 1.
The average annual bill will increase by £123.
Ofwat has approved five years of price increases, the largest of which will be seen in April, followed by smaller percentage increases in each of the subsequent four years.
The exact increase residents will see will be set by individual water companies.
For example, United Utilities and South West Water have confirmed increases of 32% and 23%, respectively.
Ofwat has said the increases will pay for a £104billion upgrade of the water sector to deliver “substantial, lasting, improvements for customers and the environment”.
April 1: Mobile and broadband bill increases
More than 40 million mobile and broadband customers are set to face price hikes from April 1.
Uswitch has estimated the increases will cost customers an additional £75million per month.
For broadband users on inflation-linked contracts, the price hikes are expected to add an average of £21.99 per year.
Meanwhile, those on newer ‘pounds and pence’ plans – where fixed price rises are determined by the provider at the start of the contract – could see costs increase by as much as £42 annually.
Ofcom‘s latest regulations mandate that telecom companies must display mid-contract price increases in clear pounds and pence, replacing the previous system of linking price rises to inflation.
However, whether your bill increases in fixed amounts or in line with inflation depends on the date you originally signed your contract.
You will need to check with your provider to check how much your bill will go up by.
And, remember there may be ways to limit the impact on your monthly costs.
April 5 – NIC top up deadline
April 5 is the last day millions of savers can top up their National Insurance (NI) contributions to boost their state pension.
Those seeking to lift their retirement income by filling gaps in their (NI) record have had a temporary extension during which they could purchase missing NI years dating back to 2006/07.
It offers a significant opportunity to potentially enhance future state pension payments by up to £113.76 per week, equating to an annual increase of £5,915.92.
But, from April 6, the usual rules will apply again, limiting retrospective contributions to the past six tax years.
While 35 qualifying years of NI contributions are needed for the full new state pension worth £221.20 a week, just 10 years are required to receive any state pension at all.
This means that filling any gaps in your NI record can significantly impact your final pension amount.
April 5 – End of tax year
The 2024/25 tax year will end on April 5, with the 2025/26 financial year starting on April 6.
It’s important to check that you’ve made the most of any perks linked to the tax year, before they expire.
Among these are steps like using up tax-free allowances, claiming benefits and checking if you’re owed cash.
So, now is the time to check you’ve used your ISA allowance, tax-free pension allowance and other benefits.
It’s also your last chance to check your tax code for 2020/21 was correct and make a claim.
April 5 – Tax Credits are abolished
Hundreds of thousands of people claiming tax credits have until April 6 to ensue they continue to receive their benefit payments.
The government is phasing out tax credits from April 5, as it looks to move several legacy benefits to Universal Credit.
People who receive Tax Credits should have received a migration notice letter from the Department for Work and Pensions (DWP).
The transition to Universal Credit is not automatic, which means it is vital for households to apply for the benefit within three months of receiving their migration notice.
If they fail to do so then their payments could be stopped.
April 6 – Employer NICs rise
On April 6 an increase in the National Insurance contributions (NICs) paid by employers will come into force.
The Government will raise employer NICs from 13.8% to 15%.
It will also reduce the threshold that businesses start paying NICs from £9,100 to £5,000.
The policy will raise £25billion – the equivalent of around £800 per employee for each firm.
The increase has already seen employers cut staffing rates, with a third saying they are looking at redundancies or reduced hiring.
Many are also expected to freeze salaries this year, leaving employees to weather inflation-linked price increases.
April 7 – State Pension increase
Millions of people are set to see an increase in their State Pension payments this month.
Recipients are set to get a hefty £473 increase to their annual State Pension from April thanks to the government’s triple lock guarantee.
The triple lock ensures the State Pension rises in line with the highest of wages for May to July, September’s inflation figure, or 2.5%.
This year, payments will rise by 4.1% in line with wage growth in the three months to July last year.
This will take the full new State Pension to £11,973 a year, up by £473 from just over £11,502, with a weekly rise from £221.20 to £230.31.
Meanwhile, older pensioners who retired before April 2016 will get £9,175.61 annually, up from £8,812.96, with a weekly rise from £169.48 to £176.45.
Retirees on a low income can get their State Pension topped up via Pension Credit. This benefit will increase by the same amount as the State Pension.
Not everyone will receive the headline amount, however, as what you get depends on how many qualifying years of National Insurance (NI) contributions you have.
April 7 – Benefits rise
Millions of households will receive a boost to their benefit payments from April 7.
Benefits typically increase each spring to keep pace with the rising costs of essentials such as food, fuel, and household bills.
This year most benefit claimants will see their payments rise by 1.7%.
This increase will apply to a range of benefits, including Disability Living Allowance (DLA), Personal Independence Payment (PIP), and Universal Credit.
Of course, the exact increase in your payments will depend on your individual circumstances.
A full breakdown of increases can be found here.
April 7 – Help to Save expansion
From this month the government’s ‘unbeatable’ Help to Save account will be made available to all recipients of Universal Credit.
The protected savings account is now available to all those on Universal Credit who earnt at least £1 in their last monthly assessment period.
It gives you a 50% bonus on any money you’ve stashed away meaning you could earn up to £300 free cash in a year.
You put between £1 and £50 into the savings account each calendar month for up to four years.
You receive your bonus at the end of the second and fourth years, with the maximum bonus worth £1,200.
So, if you put away the maximum £50 per month for 12-months you could earn £300 over the year – 50% of £600.
Will I be better off on Universal Credit?
AROUND 1.4million people on legacy benefits will be better off after switching to Universal Credit, according to the government.
A further 300,000 would see no change in payments, while around 900,000 will be worse off under Universal Credit.
Of these, around 600,000 are expected to get top-up payments if they move under managed migration, so they don’t lose out on cash immediately.
The majority of those – around 400,000 – are claiming employment support allowance (ESA).
Around 100,000 are on tax credits while fewer than 50,000 each on other legacy benefits are expected to be affected.
Examples of those who may be entitled to less on Universal Credit according to the government include:
- Households getting ESA who and the severe disability premium and enhanced disability premium
- Households with the lower disabled child addition on legacy benefits
- Self-employed households who are subject to the Minimum Income Floor after the 12 month grace period has ended
- In-work households that worked a specific number of hours (e.g. lone parent working 16 hours claiming working tax credits
- Households receiving tax credits with savings of more than £6,000 (and up to £16,000)
But if they don’t switch in the future, they’ll risk missing out on any future increase to benefits and see payments frozen.
Those who move voluntarily and are worse off won’t get these top-up payments and could lose cash.
Those who miss the deadline and later make a claim may also not get this transitional protection either.
The clock starts ticking on the three-month countdown from the date of the first letter, and reminders are sent via post and text message.
There is a one-month grace period after this, during which any claim to Universal Credit is backdated, and transitional protection can still be awarded.
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