April price rises have kicked in - act now to beat the hikes
A new wave of price hikes have hit, from council tax and prescriptions to energy and broadband - but there are still plenty of ways to cut these bills.
With the new tax year starting on 6 April, charges for many public services and utilities increased on 1 April.
But while the hikes themselves couldn't be avoided, many would have already been overpaying. So if you're paying top whack for these bills, check if you could take simple steps to save.
From 6 April, most will also see some changes to their take-home pay, as both income tax thresholds and pension contributions are rising. Check your tax code to make sure you're paying the right amount.
Which bills have risen - and how can I beat them?
A range of household bills increased on 1 April, but many will still be able to cut costs:
- Energy bills rose by up to a typical £117/yr - switch to save £300/yr. The energy price cap on standard tariffs rose from £1,137/yr for someone with typical usage to £1,254/yr. As more than 50% of people are on these tariffs, that means a chunky rise.
Use our Cheap Energy Club to check if you could switch to a cheaper deal.
- TV licences rose by £4 to £154.50 for a colour TV, and by £1.50 to £52 for a black and white licence. But you may be able to get a free licence, or even ditch it altogether.
If you're over 75, or live with someone who is, you can get a TV licence for free. And if you've been paying up until now, you can reclaim the money - a whopping £38 million's been paid back to over-75s over the last three years.
If you're not eligible for a free licence, it could be worth seeing if you could legally ditch yours by sticking to catch-up and streaming services.
- Council tax rose by an average of 4.7% in England, and rises are expected in Scotland and Wales too.
But you could be eligible for a reduction depending on your circumstances. If you live alone, you could get a single person discount of 25%, and if you have a severe mental impairment such as dementia or learning difficulties, or live with someone who does, you could be eligible for a 25% or even a 100% reduction. See our Council Tax Bands guide for full info.
Even if you're not due a reduction, you could be one of up to 400,000 households in England and Scotland which are in the wrong council tax band, meaning you could have your bills lowered and be given a backdated refund.
Plus, anyone who's moved since 1993 could be owed a council tax refund of £100+, as part of the £230 million of council tax credit which is yet to be claimed.
- Water bills increased by 2% on average, although it varies by region.
But while you can't switch water suppliers, if your house has more or the same number of bedrooms as people it's worth checking if you could save with a water meter.
Which public costs are rising - and how can I save?
As well as bills, NHS prescription and dental charges have risen in some areas:
- Prescription charges increased by 20p to £9 in England (they're free in the rest of the UK).
But 800,000 are missing out on savings of £50/year by not using prepay prescription certificates. They work out as cheaper for anyone who uses more than one prescription a month on average, so check if you could save.
- Dental charges increased by £1.10 to £22.70 for a basic check-up in England, and by 30p to £14.30 in Wales.
There's little you can do to beat this hike, but it could be worth checking whether a dental insurance plan could be a good option for you.
How are tax and pension contributions changing?
It's not all doom and gloom this April, as most will effectively get a pay rise this week due to changes to income tax and pension contributions when the new financial year begins on 6 April.
But remember that when your tax code changes, it's your responsibility to check it's correct.
Here's what's changing:
- Most will pay less tax. Income tax thresholds are going up, giving a boost to take-home pay for most.
The personal allowance, which is the amount you can earn each year without paying income tax, is rising from £11,850 to £12,500 for those earning less than £100,000.
The higher-rate tax threshold is also rising from £46,350 to £50,000. Any earnings above this point are taxed at 40%, rather than the basic rate of 20%.
You can calculate how much tax you'll pay using our Income Tax Calculator.
- Pension contribution changes mean a pay rise in the long-term - but it'll cost you now. If you're auto-enrolled into a pension scheme at your workplace, the minimum amount both you and your employer need to contribute is increasing.
In the long-term, this is a win as your employer is paying extra money into your pension pot - but in the short-term, you'll see a hit to your take-home pay as you'll also be making a larger contribution.
See Martin's warning to every UK worker aged 22+ for full info.
- You'll be given a new tax code - check it's the right one. Your 2019/20 tax code will be different to your current one (the new basic tax code will be 1250L).
If yours is wrong and you end up underpaying, you could be hit with a big bill down the line, so make sure you check as this is your responsibility rather than your employer's.
Our Tax Code guide, which is currently being updated for 2019/20, runs through the basic principles.
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