THERE are six big financial changes coming this week that households need to prepare for.
April brings the beginning of the new financial year, meaning there are several adjustments that could impact your finances.
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It’s more important than ever to be aware of your budget as the cost of living soars.
Gas and electricity prices have already gone up as the energy price cap increased on Friday.
That’s added almost £700 to the average energy bill for millions of consumers.
Events to be aware of this week include new benefit rates and the end of the tax year.
We explain the financial changes being implemented this week and how you can get ready.
Benefit changes
Benefit rates are changing from April 6, so you need to check how much you’ll get.
Universal Credit and other payments will rise by 3.1%, including child benefit and the state pension.
That means the basic amount of Universal Credit couples get will rise by nearly £16 a month.
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Pensioners who get the maximum state pension see payments rise by £5.55 a week – adding up to almost £300 a year.
Child benefit payments are rising too, so a family with two kids nearly £60 a year better off.
However, the cost of living is rising faster than benefit rates.
Inflation hit 6.2% last month – hitting a high not seen for decades.
That means in real terms many on benefits will have less cash.
You can use a free online benefits calculator to work out your new payment rates.
It’s also useful to check you’re getting all the benefits you’re entitled to.
Other benefit changes this week include millions more terminally-ill people being able to get fast-tracked benefit payments from today.
Stamps
Stamp prices have gone up from today (April 4) so you’ll have to pay more for postage.
The cost of a first class stamp is now 95p, up 10p from the previous price of 85p.
Second class stamp prices have also risen, jumping 2p to 68p.
Announcing the hikes in March, Royal Mail blamed the decision on fewer letters being posted.
The postal service said soaring inflation has contributed to the rising price, and that the hike is necessary to meet its Universal Service obligation.
That obligation means the postal service has to deliver letters to 31million home and business addresses six days a week for one price.
Post Office accounts
Thousands of households will be affected by changes to the way some benefits are paid this week.
People who get tax credits, child benefit or guardian’s allowance paid into a Post Office card account need to take urgent action.
HMRC will stop making payments into these accounts from April 5, meaning your payments could be stopped.
To avoid disruption to your benefits, you need to open a new bank account.
If you already have an account, you need to let the tax office know the details to continue getting your money.
Benefits paid by the Department for Work and Pensions, including Universal Credit and State Pension, will continue to be deposited in Post Office accounts.
But the DWP will stop paying into Post Office accounts in November 2022, so you should prepare for this in advance.
Tax year end
The tax year ends tomorrow (April 5), and the new one starts the following day on April 6.
There are several things you should do before the new year begins, including checking you’re making the most of any tax benefit entitlements you have.
Many of these benefits allow you to backdate your claims, but there is a cut off point.
You can usually only backdate by four years, meaning tomorrow is the deadline to claim for the 2017/18 financial year.
Check whether you’re entitled to the marriage allowance, as you could claim a total of £1,220 for the past four years.
Make sure you’re on the right tax code at work by checking your payslip.
If your code was wrong and you overpaid tax in the 2017/18 tax year you’ll need to claim it by April 5 this year.
This deadline also applies to uniform allowance, which allows eligible workers to claim back up to £60 a year in uniform expenses.
Savers will want to make the most of their ISA allowances before the end of the tax year, too.
An ISA (individual savings account) is a type of savings account where you don’t pay any tax on interest earned.
You can save up to £20,000 each year into an ISA and if you don’t use it up you can’t carry it over to the next year.
First-time buyers saving into a Lifetime ISA (LISA) can save up to £4,000 into this account each year tax-free and get a £1,000 government bonus.
Tax changes
Workers will pay more tax from April 6 has the government is hiking National Insurance rates by 1.25 percentage points.
It’s a new levy to help pay for social care and the NHS.
Rates will rise from 12% on earnings between £184 to £967 a week, to 13.5%.
On earnings above this amount the rate will rise from 2% to 3.25%.
That means on a salary of £10,000, you would pay £5 a year more, and on earnings of £25,000, £193 more.
More than half a million self-employed people who pay themselves via dividends will also be taxed more.
That’s because the government has put dividend tax up by 1.25 percentage points too.
The Chancellor Rishi Sunak announced in the Spring Statement that the National Insurance thresholds will also rise.
That means people will be able to earn more before they have to pay the tax.
However, the change isn’t being introduced until July.
New divorce rules
New divorce rules will come into play on April 6 to make it easier for couples to split.
The “no fault” divorce legislation means former partners no longer have to assign blame to separate.
Currently, you either have to wait two years or have proof that your partner was at fault in order to divorce.
Couples will also be able to apply for divorce jointly from this week.
At the moment, one spouse must issue divorce proceedings against the other.
Spouses will not be able to contest a divorce under the “no fault” system.
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