Remember the Autumn budget announcement made by the Chancellor last November about the new changes which will be introduced in April? No worries if not because we have outlined them for you below.
Who will be affected?
Workers on minimum wage
All UK employees over the age of 24
From pensions, to benefits, taxes and bills here are the important changes that could affect your household budget from the first week of April.
The crack down on obesity continues! From the 1st April, all drinks with a total sugar content above 5g per 100ml will be taxed at 18p a litre, while sugary drinks with more than 8g of sugar content per 100ml will be taxed at 24p a litre.
2. Car Tax
With toxic gases being linked to heart disease and lung cancer, efforts to reduce toxic fuel will kick in in April.
New cars that are bought and registered after April 2018 which do not meet the new emissions standards will be pushed up a tax band for the first year on the road – this means diesel motorists could end up paying anything from £20 to £500 a year.
3. Minimum wage increase
The National Living Wage is set to rise to £7.83 an hour for those aged 25 and over.
The minimum wage for all other workers will also go up - including apprentices who will see their rates rise 5.7% from £3.50 to £3.70 per hour.
The changes kick in on 1st April and should show up in your next pay slip.
4. Energy bills will rise
Energy bills are rising on Easter Monday, when five million customers will see their bills go up by £57 a year.
The energy price cap for safeguard and prepayment tariffs is set to rise by 5.6%, in reflection of rising wholesale costs which are expected to rise further in the Spring.
The general advice out there is to run a comparison in order to decide what is best for you. You may be better off moving to a fixed deal if it saves you more money, depending on what deals are currently out there, etc.
5. Auto-enrolment contributions to rise
Monthly contributions to your workplace pension is set to rise from 1% to 3% on 1st April. This is still compulsory for employers but not for workers, so workers are able to opt out after the first month of being on the scheme.
To do this, you'll have to tell your pension provider who'll then refund you everything you've put in so far.
However, in doing you, you will be throwing away the money from your employer’s contribution, so it is a good idea to review this carefully.
6. Personal Allowance to rise
The current tax free Personal Allowance stands at £11,500, which will increase to £11,850 on 1st April.
This means for the next tax year, you will be able to earn up to £11,850 without being liable for income tax - a move that could leave basic rate (20%) taxpayers £70 better off a year.
However, those paying the higher rate (40%) will see an increase of £46,350 a year, meaning they will be £270 better off a year, as well as the £70 that everyone else gets.
7. Mortgage holders
The Support for Mortgage Interest (SMI) benefit is for homeowners who struggle to keep up with their monthly payments. Simply put, the payments cover interest on mortgages and are paid to the lender directly.
On 5th April, this is being replaced by a loan which must be repaid (with interest) when the house is sold or when the entitlement to the benefit comes to an end.
8. Council Tax increase
95% of councils plan to increase tax by 6% a year.
Disclaimer – this information is correct at the time of publication and is provided as general information not to be relied upon without a discussion with a suitably qualified professional