This content originally appeared in the MSE weekly email on 25 March '15.
At MSE Towers, we don't waste the party poppers on the end of December, we save them for the start of April. Massive changes are afoot both for the new tax year and as many parts of the public sector change their prices then too.
Yet if you ACT NOW you can often beat the changes – here are the need to knows...
Free income tax calculator – how much will you take home next tax year?
From 6 April, the basic personal allowance – the amount you can earn before paying income tax – rises from £10,000 to £10,600. Most who earn that or more thus get an extra £120/year take-home pay. Other tax rates change too, so use our Income Tax Calculator 2015/16 to find your new pay packet.
Plus HMRC's written to around 13.5 million people with new 2015/16 tax codes. If you got one, it's your responsibility to ensure it's correct, else you'll either overpay or underpay (and thus will be faced with a big bill later). Use our free tax code calculator to check.
Warning: Big childcare changes coming. Act now or miss £1,000s
This year, likely in autumn, the new Tax-Free Childcare scheme launches and the current Childcare Vouchers scheme that lets many pay for childcare from their pre-tax income will close for new applicants. So if you're eligible for vouchers but won't be for the new scheme, get in quick...
- New Tax-Free Childcare scheme: If you're a single parent who works, or a couple where BOTH work, for every £80 spent on childcare, the Government will contribute £20 (up to £2,000 a year). Full Tax-Free Childcare info.
- Current Childcare Voucher scheme. Here you usually trade in pre-tax salary for vouchers. Eg, a basic-rate taxpayer can swap £1,000 of salary, which after tax and NI is only £700ish in your pay packet, for £1,000 in childcare vouchers. So you're £300 per £1,000 up (the max saving a year is £930).
Any parent can do this (even if their partner doesn't work) provided your employer offers it (many do, but many don't). Full Childcare Vouchers info.
- Tax-Free Childcare vs Childcare Vouchers: If you're a couple where only one works, the vouchers win hands down as it's the only one you're eligible for – so if you're not signed up, do it soon. Plus if your childcare costs are low, it's likely vouchers win. Full analysis: Vouchers vs Tax-Free Childcare and see Childcare help – are you due £1,000s? for full information.
Warning: Want a Help to Buy ISA? Don't put cash in a cash ISA from 6 April
One surprise in last week's Budget (see key budget info below) was a new first-time buyers' Help to Buy (H2B) ISA due this autumn, where for every £200 you contribute £50 is added. See our full Help to Buy ISA guide.
Yet the urgent point is that you can't contribute to a H2B ISA and a cash ISA in the same tax year. So if you want a H2B ISA (it's far more lucrative than a normal one) don't open a cash ISA in the new tax year starting 6 April and if you've a direct debit to an existing one stop it now, or you won't be eligible for a H2B ISA when they launch this autumn.
Yet there's nothing stopping you filling this tax year's cash ISA allocation though – see Top Cash ISAs – or using a stocks and shares ISA next tax year.
Child Trust Funds can be converted to Junior ISAs
If your child was born between 1 September 2002 and 2 January 2011 they were eligible for a Child Trust Fund (CTF) – often the Govt added a lump sum, plus parents can add cash tax-free on top. It's since been replaced by Junior ISAs – yet those who had CTFs have been stuck with them getting far worse returns and less choice.
I've long campaigned to allow CTFs to be converted to Junior ISAs and thankfully from 6 April you can. Plus you'll then be able to add a further £4,080/year. I'll of course give a full briefing on what to do in April, but for now, see the Top Child Trust Funds and Top Junior ISAs guides.
Water saving... 'Switching to a water meter saved me £720/year'
No joke, on 1 April water bills in England and Wales fall by an average of 2% – some by as much as 7%, though a few areas will rise by up to 2% (see price changes list). Yet it's Water Saving Week, and these changes are trivial compared to the savings many make switching to a meter. Follow this rule of thumb:
If you've the same or more bedrooms in your home than people, do a check to see if you can switch to a water meter – Free calculator.As Jacqui emailed, "Over many years I’ve paid £65/month for my water bill. After following your suggestion, my current water bills are now £4.50/month. A great saving – I wished I’d done it years ago." That's £720/year saved.
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Council tax UP by up to 5% but save £1,000s if you can reband
Some councils are upping it, some freezing it, but the really big savings come from checking you're in the right band and if you're due exemptions.
- Are you in the right band? Up to 400,000 homes in England and Scotland may be paying too much. I came up with a check and challenge your council tax band system and 10,000s have succeeded, such as Michael who emailed: "I got my banding reduced (I was two bands higher than everyone else in my street) saving me £100/year plus a £1,200 refund. I'm VERY grateful – it was easy."
- Are you due an exemption? Those who live alone and some others can pay less – see our council tax exemptions list.
Beat Monday's stamp price rise
On 30 March a letter-size 1st class stamp rises 1p to 63p; 2nd class 1p to 54p. Yet stock up before then and as long as it just says "1st" on it, not the price, it's valid afterwards. See Stamp hike.
English prescription charges up 15p – but there's a trick to save
Prescriptions are free unless you're in England and even then some are exempt. If you do pay, the charge rises to £8.20 on 1 April. Those who regularly get them can make big savings with prepay prescription certificates – they cover all prescriptions for three months for £29 or £104/year and the price is frozen.
Dental charges UP – drill down on costs now
On 1 April, basic NHS dental treatment in England rises 30p to £18.80, Wales 50p to £13.50, Scotland up 1.61% (though the rise comes in later) and Northern Ireland may go up 1%. If you need treatment, you may want an appointment beforehand.
State pension UP £2.85 (yay) – but are you due more?
The basic single state pension rises to £115.95/week and the joint pension is up £4.55 to £185.45/week. Yet over 1,500,000 pensioners are eligible for Pension Credit which can add up to more than £2,000 a year, but don't claim it.
Of course massive changes are due on 6 April to private pension saving and taking your pension too. I'll be honest, we're beavering away at huge new free booklets to help you through it – we hope to publish by mid-April.
Time is UP by one hour this weekend
I can save you money, but I can't save you time (in this case). We all lose an hour on Sunday as clocks go forward at 1am – but it does mean much lighter evenings (hurrah).