Households across the UK will face a series of financial changes from 1 and 6 April, affecting council tax, wages, tax allowances, and more. The changes come as the government's financial year begins, with many costs rising while some workers see gains.
Council tax bills in England will rise by an average of 4%, equating to £61 for a typical Band D property. In Scotland, the average increase is 3%, but households in bands E to H face extra rises due to a multiplier change, with band H properties likely paying £517 more. Welsh council tax will rise by 3.1% on average, while Northern Ireland rates remain undecided due to political issues.
On a positive note, the personal allowance for income tax rises from £11,000 to £11,500 from 6 April, saving over 20 million people £100 a year. The higher-rate tax threshold increases from £43,000 to £45,000, saving higher-rate taxpayers £400 annually, though Scotland's threshold remains frozen at £43,000. The National Living Wage for those aged 25 and over rises 4% to £7.50 per hour, while the National Minimum Wage for 21-24 year olds increases only 1.4%.
Savers can open a new Lifetime ISA from 6 April, offering a 25% government bonus up to £1,000 per year, aimed at first-time buyers and retirement savers. The annual ISA allowance rises to £20,000. Vehicle Excise Duty changes from 1 April, with new cars paying a first-year rate based on emissions, then a standard rate of £140, plus an extra £310 for cars over £40,000.
Inheritance tax sees a new main residence allowance of £100,000, allowing married couples to pass on up to £850,000 tax-free, rising to £1m by 2021. However, child tax credits are cut for new claimants: the family element (£545) is removed for first children born after 6 April, and support for third or subsequent children is limited to two children only.
