10 money changes from April after Rachel Reeves spring statement | Personal Finance | Finance
UK households face an array of money changes from April as the new financial year starts, with increases to benefits, pensions and minimum wage all due to kick in. These uplifts come alongside hikes to energy bills, water bills and Council Tax, with many of the changes coming into effect on the same day.
It comes after Rachel Reeves announced further welfare budget cuts in her Spring Statement, building on cuts to the disability and incapacity bill set out earlier this month. The Chancellor told the House of Commons the package of cuts is now estimated to save £4.8 billion in the welfare budget. She also announced £1 billion will be invested in employment support to get more people back into work, alongside a crackdown on tax evasion which she said would raise £6.5 billion per year for the public purse.
As the April price hikes loom, UK households are urged to check if it’s possible to mitigate any of the impending costs before they take effect. Listed below are 10 money changes that will affect households finances from April:
Energy bills – April 1
Annual energy bills for households on a standard variable tariff in England, Wales and Scotland will rise by £111 on average from April 1 as Ofgem increases its price cap from £1,738 per year to £1,849. The rise marks a 6.4% hike in energy costs and will affect around 22 million homes.
The price cap sets the maximum rate per unit and standing charge that customers can be charged by suppliers for their energy use – not the total bill, so those who use more energy will ultimately pay more.
Standing charges, which are fixed daily fees to connect to a gas and electricity supply and vary by region, are also rising again for gas but will drop for electricity, although it depends on where you live.
It may be possible to beat the April price cap by switching tariffs and fixing at a cheaper rate, with experts urging people to look for better deals now to protect against further price increases.
Water bills – April 1
Water bills will increase by an average of £123 (a 26% hike) from April 1 for households in England and Wales to help fund upgrades in the water sector, with smaller percentages to follow in each of the next four years.
Regulator Ofwat says further price rises are planned over the next five years, allowing water firms to increase average bills by £31 per year, or £157 in total, to £597 by 2030.
Some regions will face higher rises than others, with Southern Water hiking bills by 47%, whereas Anglican Water and Northumbrian Water are only rising by 19%.
According to Money Saving Expert founder Martin Lewis, households can potentially save hundreds of pounds by switching to a water meter, as this means you’ll only pay for what you use. He says households should follow his “rule of thumb” that if you have more bedrooms in your home than you do people – or the same number – then you “almost certainly should be using a water meter”.
Broadband and mobile phones – April 1
The majority of customers who took out a broadband or mobile phone contract on or before April 10, 2024, will face an increase of 6.4% from April 1, based on the inflation rate last December and an additional charge.
Council Tax – April 1
Council Tax bill rises will hit 5% from April 1 for the third consecutive year as almost all councils increase bills up to, or close to, the maximum permitted.
The average annual Band D bill (the standard measure of council tax) will be £2,280 including all precepts this year, marking an increase of £109 compared to last year.
A total of 293 out of 384 lower and upper tier councils subject to referendum principles (which allow them to raise the levy by 4.99% without triggering a local referendum) have opted to hit the threshold, while 56 chose to go close to the maximum. It means 91% of councils felt it necessary to impose significant increases.
TV Licence – April 1
The cost of a TV licence will increase by £5 from April 1, rising from £169.50 per year to £174.50. For a black and white TV it will go up by £1.50, rising from £57 to £58.50.
Stamp duty – April 1
Stamp duty will become more expensive for some homebuyers from April 1. The current “nil rate” band for first-time buyers is reducing from £425,000 down to £300,000, while other buyers will see a reduction from £250,000 down to £125,000.
Stamp duty is a tax paid on the purchase of a property in England and Northern Ireland and is paid as a percentage of the property price. So any transactions which complete after April 1 will now be subject to the increased rates of stamp duty, resulting in thousands of pounds of extra costs for homebuyers.
National Living Wage – April 1
The government has confirmed a 6.7% increase to the National Living Wage from April 1. The pay boost will be worth £1,400 per year for an eligible full-time worker, with those aged over 21 seeing their hourly rates rise from £11.44 to £12.21.
The National Minimum Wage for 18 to 20-year-olds is also set to increase by £1.40 from £8.60 to £10.00 per hour – a record increase which means full-time younger workers eligible for the rate will see their pay boosted by £2,500 a year.
The minimum hourly wage for an apprentice will also rise from April, with an 18-year-old apprentice seeing their minimum hourly pay increase by 18.0% – a pay bump from £6.40 to £7.55 per hour.
Benefits uplift – April 6
Inflation-linked benefits and tax credits will rise by 1.7% from April 6, in line with the Consumer Prices Index (CPI) rate of inflation in September 2024, giving UK households an extra dose of cash in their bank accounts. The uplift applies to working age benefits which includes Universal Credit, Personal Independence Payment (PIP), Attendance Allowance, and Employment and Support Allowance (ESA) among others.
State Pension – April 6
The basic and new State Pensions will be uprated by 4.1%, in line with the annual increase in the average weekly earnings index for May to July 2024. As the State Pension system is split into two schemes – basic and new – the amount your pension payments will increase from April 6 depends on when you retired.
Men born before April 6, 1951, and women born before April 6, 1953, receive the basic State Pension and will see their pensions increase by 4.1% from £169.50 per week to £176.45 – a weekly increase of £6.95.
Those claiming the new State Pension will also see their payments increase by 4.1%, with the full rate rising from £221.20 per week to £230.25.
Stamps – April 7
Stamp prices will rise again on April 7, marking the sixth price hike by Royal Mail in three years. The cost of a first-class stamp will increase by 5p to £1.70, and second-class stamps will go up by 2p to 87p.
