All the major financial changes happening in April - including to benefits, bills, wages & prescriptions
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With the new tax year fast approaching and the Spring Budget all set, the UK is set to be hit with a variety of changes to their living and working costs over the next month. From household bills to everyday expenses, important financial changes are coming this month that all Brits should be aware of, especially with the cost of living crisis ever present.
Joe Lytwyn, senior partnerships manager at thimbl, has broken these down into nine categories. He said: “The cost-of-living crisis has put money at the forefront of many Brits’ minds this year.
“But with prices constantly on the rise, it can be stressful trying to keep up with all of the new laws and regulations. Whether it’s your energy bills, your council tax or your broadband, knowing how these changes could affect you in the coming months may be important to help you stay on top of your finances.”
Here are all the major financial changes coming in April you need to know about.
9 major financial changes coming in April as new tax year begins
Energy Price Guarantee
“The Government’s Energy Price Guarantee aims to protect UK consumers from rising energy prices by enforcing a limit on how much energy suppliers can charge their customers per unit of energy used up until April 2024. Although this has meant that the typical household bill would cost no more than £2,500 annually since October 2022, this was expected to increase by 20 per cent to £3,000 this April.
“It is important to note, however, that this figure is determined by how much energy a household uses – if you use more, you will pay more. Despite this, the Government has recently announced in the Spring Budget that they will be making a U-turn on the scheduled price increase and instead keep the figures at £2,500 for a further three months.”
“All state benefits are also set to increase in line with inflation this April at a rate of 10.1 per cent. The Department for Work and Pensions (DWP) announced these measures to help people in line with the rising cost of living.
“One key area that is due to experience this increase is Universal Credit. Those who claim this benefit that are both under 25 and single will see their allowance rise from £265.31 to £292.11 per month, while couples under 25 will see this rise from £416.45 to £458.51 per month.
“Similarly, single persons aged 25 and over will see their Universal Credit jump from £334.91 to £368.74. Meanwhile, couples over 25 will receive an increase from £525.72 to £578.82.”
“A 10.1 per cent increase will be enforced on the State Pension in April 2023. This follows plans to reintroduce the ‘triple lock’- a legislation which commits to raising the State Pension depending on whichever of the following three conditions is highest that year: average earnings (from March to July), inflation (from September onwards), or by a flat rate of 2.5 per cent.”
“Although this measure was suspended in 2022 due to the pandemic, it will return this year. Retirees on the New State Pension, having reached State Pension age on or after April 6 2016, will now see this increase from £185.15 per week to £203.85 per week. Anyone on the Basic State Pension will see the rate rise from £141.85 per week to £156.20 per week.”
Lifetime and Annual Pension Allowance
“The Government has announced that it will introduce tax relief measures for workers over 50. The Lifetime Allowance, which for most Brits has been valued at £1,073,100 in the tax year 2022/23, will be abolished entirely in 2024.
“In preparation for this, charges for those who exceed this allowance will be scrapped in April 2023 to encourage high retention in the UK workforce. Changes will also be made to the Annual Allowance, which will be increased to £60,000 from April 2023 onwards.”
National Living Wage/Minimum Wage
“From April 2023, the UK National Living Wage will undergo a 9.7 per cent increase measuring at £10.42 an hour. The National Minimum Wage for younger workers will also be on the rise this April, as rates for both apprentices and 16-17 year olds rise to £5.28 an hour, and rates for 18-20 year olds to £7.49 an hour.
“Those between the ages of 21-22 will experience the most growth to their wages, with a 10.9 per cent increase taking them up to £10.18 an hour.”
Bills and Subscriptions
“Although the Energy Price Guarantee will be extended through to June, the Energy Bills Support Scheme (EBSS) will not experience a similar renewal and will instead be scrapped as expected by the end of March. The EBSS granted UK households £400 off of their energy bills from winter 2022 onwards.
“All households with a domestic electricity connection in England, Wales and Scotland were eligible for this scheme, with residents in Northern Ireland getting £600 towards their energy bills as a part of the region’s own EBSS. The average annual household water bill has been forecasted to rise by 7.5 per cent from April, taking the figure up to £448. Exact rates will depend on your provider.”
“Broadband price hikes are a common occurrence as we enter the Spring season and this year is no exception. In line with inflation rates set by the Consumer Price Index (CPI) and Retail Price Index (RPI), these hikes could peak at up to 17.3 per cent depending on your broadband provider.”
Council Tax and Income Tax
“Depending on which region of the UK you live in, Brits could expect to see their council tax rise by almost 5 per cent in April, with warnings that three in four councils across the country are set to implement these increases to the maximum amount. For higher earners, the current additional rate income tax threshold of £150,000, at which those earning an annual salary above this figure are taxed at a rate of 45 per cent, will fall to £125,140 from April 2023.”
“From April 1st 2023, in line with an inflation rate of 3.21 per cent, prescription charges will increase by 30p from £9.35 to £9.65. The cost of prescription prepayment certificates (PPCs) will also go up, with the 3-month PPC costing £31.25, the 12-month PPC costing £111.60, and the Hormone Replacement Therapy PPC costing £19.30."
Stamps and Postage
“Royal Mail are set to hike up their standard stamp prices by 15 per cent from April 3rd, as first-class stamps increase from 95p to £1.10, whilst second-class stamps increase from 68p to 75p.
“Large-letter stamps will also be hit by this inflation, with first-class stamps rising from £1.45 to £1.60 and second-class stamps rising from £1.05 to £1.15.”