THE new year brings with it changes that could affect the money in your pocket throughout 2022.
Here’s what to expect and when so you can plan ahead, including changes affecting benefit payments like Universal Credit and state pension.
1
January 2022
Tax return deadline
Millions of people working for themselves will have to file their annual self-assessment tax return online by January 31.
The self-assessment will cover self-employed earnings from the previous tax year from April 2020 to April 2021.
If you miss the deadline you could have to pay a cash penalty if you don’t have a good excuse, and interest on top if you leave it too long after the date.
Some families will also need to fill in a self-assessment tax return to pay back some child benefit they get.
Many parents may not realise they have to register and pay a high income child benefit tax charge (HICB) through the self assessment tax system – even if they get a salary through employment.
Most parents can claim £84.60 a month in child benefit for their first child and £56 for each additional child.
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But since 2013 anyone earning more than £50,000 has to pay a HICBC to continue receiving it, and once income reaches £60,000 all the benefit must be repaid.
So for example someone earning £55,000 and claiming for one child would have received £1,115.65 in the previous tax year, but would have to pay £557 to cover the HICBC, according to HMRC’s child benefit calculator.
March 2022
Employment Support Allowance (ESA) claims
People who are ill or disabled can apply for ESA help, and could get up to £74.70 a week.
When Covid hit, the government made tweaks to the benefit allowing those eligible to make a claim from the first day they were absent from work – instead of the usual eighth.
This rule will be kept in place until March 24, 2022.
You’re eligible for ESA if you’re under state pension age and you have a disability or health condition that affects how much you can work.
You need to have worked either as a self-employed worker or as an employee, and you can’t get ESA if you claim Jobseeker’s Allowance or Statutory Sick Pay.
Energy price cap rise
Energy bills have already rocketed because of rising wholesale costs and they are likely to rise in future too.
The energy price cap limits how much you’ll pay for gas and electric and that cap is set by the energy regulator Ofgem.
The cap is reviewed twice a year and the next change will come in from April.
Experts have warned that the next change will be a rise and that it could add £1,000 a year more to household bills.
Here’s all the ways you could get help paying your bill this winter, plus what you can do to reduce your bills around the house.
Rail fares rise
Rail fares will rise by 3.8% in March – the biggest increase to train travel costs in a decade.
The cost of a train ticket could go up by hundreds, depending on the route.
For instance, an annual commute from Oxford to London including a London travelcard will increase by £245 to £6,700.
Not all fares will increase though and the price changes will vary across regions and rail operators.
Here’s eight clever hacks for saving on your travel costs if you’re going by train.
April 2022
Child benefit and tax credit payments to Post Office accounts
Anyone who gets child benefit or tax credits paid into a Post Office Account will no longer get payments into these accounts from April 2022.
That’s because the accounts are closing and you’ll need to arrange to get the money paid into a different account before then.
You can check out what you need to do if you’re affected in our guide.
Surplus earnings threshold for Universal Credit
Universal Credit claimants will continue to get the higher surplus earnings threshold of £2,500 until April 2022.
After this time, it will be reduced to £300.
Surplus earnings are taken into account in your next monthly assessment period for Universal Credit.
For example, if your monthly earnings are more than £2,500 over where your payment stopped – the current threshold – this becomes “surplus earnings”.
These surplus earnings are then carried forward to the following month, where they count towards your earnings.
If your regular income and surplus earnings are then still over the amount where your payment stops, your Universal Credit payment will be affected.
The extension of the higher earnings threshold was confirmed by Chancellor Rishi Sunak in his Budget in March.
Universal Credit, state pension and benefits rise
Benefit payments are set to rise this year by 3.1%, the government has confirmed.
That means you could get more money paid from April onward, including Universal Credit and state pension.
For example the Universal Credit standard allowance will rise by £10.07 a month from £257.33 to £265.31 for those single and aged 25 and over.
You can check out all the new rates for Universal Credit rates here.
Also rising is the state pension and those getting the maximum amount under new rules will be almost £300 a year better off.
You can check out the new state pension rates here, while those on the lowest incomes will also get more through pension credit.
Anyone getting housing benefit and allowances for looking after others will get more money too – here’s the full list of benefit rates rising from April.
National Insurance rate rise
Millions of workers will pay more National Insurance from April to help cover the costs of social care.
The hikes will hit the finances of around 25 million Brits, who will have to pay 1.25% extra in NI contributions.
So on earnings between £9,568 per year and £50,270 per year the current rate of 12% will rise to 13.25%.
On earnings over £50,270, it will increase from 2% to 3.25%.
It means someone earning £25,000 will pay around £193 more a year in National Insurance, and someone with a £50,000 salary will pay around £505 more.
Minimum wage rise
The minimum wage is set to rise for millions of Brits in April, putting more in their pockets.
The legal minimum for those aged over 23 (known as the National Living Wage) will increase to £9.50 from £8.91.
For those under 23, the rates for the National Minimum Wage will also rise, but by how much depends on your age.
Those aged 21-22 are entitled to at least £8.36 an hour now. This will rise to £9.18 an hour from April 2022.
For those aged 18-20 the minimum wage is £6.56 now and will rise to £6.83 from April.
And for those aged 16-17 the current rate of £4.62 will rise to £4.81
The Apprentice rate is currently £4.30 and will rise to £4.81 too, bringing it into line with under-18s.
Pension boost for part-time workers
Thousands of workers could get a major cash boost to their pension at the same time the national living wage rises.
When the minimum wage increases, the boost will bump some people’s pay over the amount needed to be enrolled in a pension through their work automataically.
Experts say this could be affect thousands of workers, and particularly those who are employed part-time.
Workers need to earn £10,000 a year to be auto-enrolled, though anyone earning slightly less can ask to join.
It could boost their pension savings by up to £4,800 through contributions made by employers alone, which is essentially free cash. And that’s on top of the money they save themselves.
Workers on low income could also get a boost to pensions after a tax-relief loophole closes – but not until 2024.
Council tax rise
Council tax rates rise each year in April but by how much depends on where you live.
Each local area sets the rates but the increase is expected to add around £400 a year to bills, on average.
Councils can add around 2.5% to 3% to bills and the cash amount this will add also depends on your council tax band.
Hargreaves Lansdown senior personal finance analyst Sarah Coles previously told The Sun: “Last year the average Band D council tax is £1,898, but someone on Band D in Westminster is paying £829 a year while someone on Band D in Nottingham is paying £2,226.
“This means a percentage-based rise in council tax hits those with higher bills even harder.
“A 3% rise in Nottingham would mean an extra £66.78, while in Westminster it would mean a rise of £24.87.”
Each council will announce the amount that bills are set to rise in the coming months, usually via a letter to households, and it comes into effect from April.
If you’re struggling with your council tax bill or worried about the rise it’s worth checking the help you can get to cover the cost.
October 2022
Energy price cap rise
A second annual review of the energy price cap will take place in 2022 and come into effect from October.
The second change of the year follows an expected rise in April – the exact amount of which is yet to be announced.
Energy prices are rising but the October rise is still some way off and there could still be changes in the energy market between now and then affecting the change.
Before the major increase to bills this winter, the price cap increased by £96 in April 2021and £139 in October 2021.
November 2022
Universal Credit and state pension payments
Post office accounts will close in November for anyone getting payments from the Department for Work and Pensions (DWP).
That includes Universal Credit and state pension payments.
The November deadline is later than for payments that come from HMRC – child benefit and tax credits – and those are due to end in April, as explained above.
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