Taxes, bills, benefits and me
The early Budget in March threw out a raft of changes which kicked in from April. Given April 5th was tax-year-end, it’s not a bad time to take financial stock and where taxes, rates, policies and benefits all stand within the UK’s overall economic picture.
And big-picture-wise, maybe the first headline is the shards of light poking through.
Let’s remember inflation was licking double digits just one year ago. Today it’s down to 3.8%. Prices aren’t yet plummeting all around us, but there are some morsels of hope and a more positive economic outlook to cling to.
Ready for some ups and downs?
Let’s start with the bad
The more notable rate rises of-the-moment include council tax, water and telecoms bills. The average council tax bill across England will rise 5%, but that average hides the fact there’s a 21% rise in store over two years for residents in Birmingham.
Water bills are set to rise by an average of 6% in England and Wales, and 8.8% in Scotland. Funnily enough, an extra 8.8% will also hit the average broadband and mobile phone bill, while the old TV license will edge up to £169.50.
As of April, dental charges in England nudged up 4%, taking the cost of a check-up from £25.80 to £26.80, and the cost of a crown from £306.80 to £319.10.
Road tax is also heading north for all but the cleanest vehicles. High-polluting vehicles may face an increase of 6%. Although you might argue this isn’t truly bad …
And throw down some better
Energy costs skyrocketed after the pandemic and in the wake of Russia’s invasion of Ukraine. Better news now is that energy prices are at their lowest in two years, dropping £238 a year or circa £20 per month on a typical bill.
Further cuts to National Insurance came in last week slicing employee contributions to 8%. It’s the second such cut this year — NI was 12% in January — and Treasury maths says average salary earners (£35,400) will save over £900 as a result.
If you have young children then it’s worth noting that free childcare support in England is being extended. Eligible working parents of two-year-olds will be entitled to 15 hours of free childcare per week, typically for 38 weeks in the year.
There’s also an increase in the child benefit threshold. Basically the tax system will only start clawing back benefits if one earns £60,000 (up from £50,000) and only those earning £80,000 or more will lose child benefits entirely. The government reckons half a million families will be better off by an average of £1,260 in 2024-25.
Brighter colours
Taxes, bills, benefits – we’ve given only the headlines but your personal situation and set-up will determine how April’s moving and shaking will play in your life.
If you want to put pounds and pence against recent policy changes we urge you to do some further reading.
For now, we hope some brightness is shining on your financial life … and on that note, places are still available on the Money Means wait list. Click here for a little bit of that.