Customer LoginThe new financial year: the good and the bad
March is almost over and the new financial year will be upon us very soon – which, as always, means lots of potential changes for your finances. (Annual changes like this are why we carry out regular income and expenditure reviews with our Debt Management Plan customers, to make sure your budget still works for you – even when you think your circumstances have stayed the same, all these price rises can add up!)
Check out our Budget blog to make sure you’re up to date with all the financial support available to help you if you’ve been affected by the pandemic. And then check below for the good news, the bad news, and what you need to do to get ready for April.
#1 Bad news: for drivers
Fuel duty remains frozen, for the tenth year running, but Vehicle Excise Duty (‘road tax’) is going up. You can check how much you’ll pay on the government’s website.
Benefit in Kind rates have also been reintroduced for company cars: again, have a look at gov.uk to check rates.
You can spread your car tax payments to make them more manageable: for more information on this and other tips, read our blog How To Lower The Cost Of Your Car.
#2 Good news: for pensioners
The state pension will rise 2.5% on the 12th of April. The amount individuals receive tends to vary, but the new figure for people with full credits on the new-style pension will be £179.60 a week.
#3 Bad news: your council tax is going up
Every local authority is increasing council tax by at least the rate of inflation, and in some cases up to 5% – if you haven’t had your annual bill yet, check your local council’s website to find out how much you’ll pay next year.
If you think you’re in the wrong council tax band, you can challenge it.
#4 Good news if you earn minimum wage
On the 1st of April the ‘National Living Wage’ will increase from £8.72 to £8.91, and for the first time the age threshold for this rate of pay will be lowered from 25 to 23.
You can use the National Minimum Wage calculator on the government’s website to make sure your employer is paying you the right amount. If you’re not being paid at least the minimum wage, or if you think your employer is deducting money from your pay when they shouldn’t, Citizens Advice has information on how to enforce your rights.
#5 Bad news: the energy price cap is going up
For six months from 1st of April the price cap will increase by £96 to £1,138 per year for those on default tariffs, and by £87 to £1,156 for people with pre-payment meters. We’ve got tips on how to cut your bills – including switching your provider, which is often the easiest and best way to save – in this blog about energy bills during lockdown.
#6 Good news? Statutory Sick Pay is going up…very slightly
The weekly rate of Statutory Sick Pay (SSP) will increase from £95.85 to £96.35 from 6th of April. Don’t forget you may be entitled to Universal Credit or other benefits at the same time as receiving SSP – use our independent, free benefits calculator to check.
#7 Bad news if you pay for prescriptions
The NHS prescription charge in England will increase by 20p to £9.35 from 1st of April. Scotland, Wales and Northern Ireland are unaffected.
If you’re on a low income, even if you don’t receive any of the benefits that automatically entitle you to free prescriptions, you may qualify for the NHS Low Income Scheme (LIS) – check the eligibility criteria and download a form from the NHS website.
#8 Good news: statutory parental leave pay is going up
Statutory Maternity, Paternity, Adoption, Shared Parental and Parental Bereavement Pay are all going up from the 4th of April: you can check rates on gov.uk. Again, don’t forget you may be entitled to benefits at the same time.
#9 Bad news: the cost of TV Licences is going up
The licence fee will change on 1st of April 2021, going up by £1.50 to £159.
#10 Good news: slight increases and changes to benefit payments
Most benefits administered by the Department for Work and Pensions will go up by 0.5% on the 6th of April – these include Universal Credit, Personal Independence Payment (PIP), and legacy benefits such as Jobseeker’s Allowance, Disability Living Allowance (DLA), Employment and Support Allowance (ESA), Income Support and Housing Benefit. Child Benefit will also increase, by 10p per week for the first child and 5p for subsequent children.
#11 Tax thresholds: good and bad news
On the 6th of April the tax-free personal allowance will increase from £12,500 to £12,570, and the higher-rate tax threshold will increase from £50,000 to £50,270 – but these thresholds will then be frozen for five years. So, although you may be a few pounds better off in the next financial year, you’re likely to end up paying more tax in the medium term.
It’s a good time to make sure you’re paying the right amount of tax. There’s a guide on the government’s website to help you work out if you’re paying too much income tax. There are a number of ways you might be able to claim some tax back, for example if you’re married, or – particularly during the pandemic – if you work from home. Claim before the financial year ends to make sure you don’t lose out!
