Cost of Living Crisis Price Changes
As of April 1st, there are some legislation changes, uplifts and financial changes that will benefit most households.
£900 back in National Insurance cut
From April 6, the government is cutting 2% of the amount of National Insurance tax you lose from your pay, on top of the 2% already handed out in January.
It means that the two cuts, worth an average of £450 each, will see a £900 boost on average this year from April.
£238 energy price cap reduction
From April 1st, the Ofgem price cap is being officially reduced from an average of £1,928 per year to £1,690 per year, which will result in a £238 saving for energy customers on average. Ofgem announced this price cut is from 1st April to 30th June 2024.
£470 Universal Credit boost
Uplift in Universal Credit will come to a total benefits amount of £470 per family per month, ranging from at least £292.11 per month up to £617.60, depending on age and circumstances.
This will mean a single person aged 25 and over will see their UC increase to £393.45 per month from £368.74.
5.5 million Universal Credit families are forecast to benefit in 2024/2025 (equivalent to an increase of around £39 per month). Universal Credit claimants will also get more time to pay back budgeting advances.
£310 state pension boost
Inflation-linked benefits and tax credits will rise by 6.7% from April 2024, in line with the Consumer Prices Index (CPI) rate of inflation in September 2023. From April, the Full Basic State Pension will also increase in line with the 'triple lock', from £156.20 per week to £169.50, an increase of £13.30. The Full New State Pension rises by £17.35 from £203.85 to £221.20.
Tax cut for self-employed
Two million self-employed workers will see their National Insurance bill fall from 8% to 6% of their income. This is worth £350 a year to a self-employed person earning an average income of £28,200.
Minimum wage increasing
Both the National Minimum and National Living wages will rise in April.
Workers aged 21 and over will be entitled to the National Living Wage and see their pay go from £10.42 to £11.44. For someone working full-time, this is the equivalent of a pay boost of £1,856 a year.
Meanwhile, workers aged 18 to 20 will see their pay go from £7.49 to £8.60, under 18s from £5.28 to £6.40 and apprentices from £5.28 to £6.40.
Sick pay increasing
Sick pay will increase from £109.40 to £116.75 per week.
Statutory pay increasing
Rates of statutory maternity pay, statutory paternity pay, statutory adoption pay, statutory shared parental pay and statutory parental bereavement pay will increase from £172.48 to £184.03 per week.
Child Benefit Rules
There will be changes to the Child Benefit rules, and the £90 debt relief order fee will be scrapped in England and Wales.
Free childcare hours extended
Working carers of two-year-olds will start getting 15 hours of free childcare from April.
Eligible working parents must be in employment and earning less than £100,000 a year.
Currently, most parents only get free hours once their child turns three, but it has been extended to parents with younger children.
Parents who qualify would have to apply by March, otherwise, you won't be able to claim until September 2024.
Debt relief order fee scrapped
A Debt Relief Order (DRO) is designed to help you deal with personal debt you cannot pay. The administration fee is usually around £90, however, the fee is set to be scrapped from April 6th. You can get free help with debts from charities such as Citizens Advice, StepChange and National Debtline.
Household Support Fund extended
The Household Support Fund has been extended again. Councils have until August to allocate their share.
What help you can get and who qualifies will be determined by each council so contact your local council to find out what help is available.
Flexible working
This month, employees will have the right to request flexible working hours from the first day that they begin a job.
Currently, staff have to be employed for 26 weeks or more and have the right to ask if they can work flexibly and can only make one request in 12 months. From April 6th they can make two requests in 12 months.
Rail fares frozen
Rail fares across the country are proposed to rise by 4.9% on March 3rd, but services across the Merseyrail network will now be frozen for six months to support passengers with the cost of living.
Single or return tickets, day savers and RailPass tickets will remain at their current price until autumn under the new proposals.
Whilst some financial changes are coming that will benefit most households, be aware that there have been several increases in bills/payments too.
Mobile and broadband costs rising
BT, EE, iD Mobile, Plusnet, Three and Vodafone are all hiking their prices by 7.9% while others are increasing them by up to 8.8%.
You can beat the price hikes by switching providers, as often you’ll get a cheaper deal as a new customer.
TV license rising
BBC TV Licence fee is going up to £169.50 a year, the equivalent of an additional 88p per month. It's the first time the price has risen since 2021.
You may be exempt from paying for a TV licence if you're on Pension Credit and over a certain age.
Remember If you watch or record any live TV at home, or stream content on BBC iPlayer, then having a TV licence is a legal requirement. However, if you solely watch on-demand entertainment from the likes of Netflix, Prime and Disney+, then you may not need one.
Council tax increases
Around 95% of English councils are increasing their council tax this month.
Councils across Merseyside are set to hike the price by 4.99% with 2% spent on adult social care services.
Your band dictates how much you pay on your council tax and is between A-H. But remember you might entitled to council tax support, depending on your circumstances.
Flight prices increasing
Air passenger duty (APD), which is charged on all UK flights, is rising from April 1st. There will be four different tiers for what you'll have to pay when flying.
Domestic flights' APD will increase from £6.50 to £7 for economy and from £13-14 for business flights.
Band A flights (0 - 2,000 miles) will remain the same price.
Band B flights (2,001 to 5,500 miles) will rise to £88 from £87 for economy tickets, and to £194 from £191 for business tickets.
B and C flights (over 5,500 miles) will rise to £92 from £91 for economy tickets and to £202 from £200 for business tickets.
DVLA car tax rise
Car tax is set to rise from April 1st.
From April 1, 2024, Vehicle Excise Duty (VED) will increase in line with inflation - the Retail Price Index (RPI). How much extra you'll pay depends on your make and model of car and how much emissions it produces.
Cars registered after April 1, 2017, will face a £10 increase. Those with newer vehicles emitting over 255g/km face a steeper increase, with first-year tax rises by £140 to a total of £2,745.
Those registered after March 1, 2001, are categorised by pollution levels. Top B and M incurs a £40 hike, from £695 to £735 annually. B and L see a £35 increase, while K and J rise by £20 each.
For cars registered before March 1, 2001, the tax rules are based on engine size rather than emissions. Vehicles with engines under 1.5 litres incur an annual tax of £200, while larger engines are taxed at £325.