Archive: MoneySavingExpert's Money Tips Email

Martin: Cost of living crisis will hit harder from April. Act BEFORE THEN to try to reduce the pain

- Beat price hikes, incl broadband, energy, stamps, water?
- Urgently claim... tax back, marriage tax, PPI tax and more
- Use or lose ISAs, LISAs and more

The news is difficult to cope with right now. And while nothing we face compares to the dangerous, tragic, desperate situation in Ukraine (see how to donate money or needed items there) - life in the UK will get harder to afford for many.

Some of this is due to the necessary sanctions on Russia, which will exacerbate the cost of living crisis. Yet we must be watchful that the narrative doesn't change so the whole cost of living crisis is attributed to it. Many rises predate the conflict, and are due to structural problems that have been running far longer.

I don't have a magic wand to wave. Some areas can only be improved by political intervention, not MoneySaving - some, not all. Yet there are things you can do, and most need doing sooner to work...

1 April is the traditional time for utility and public service price hikes. This year is going to be the worst in my professional memory, with inflation (which groups together all price rises) predicted to hit a dire 8%. Action now is important - not everything is beatable though.

1 April: COUNCIL TAX UP 3% (typically £57/year)
Most councils have indicated they'll raise it by the max allowed, usually 3%, adding a typical £57/year for a band D property in England. You can't stop the rise, but do double-check you're not already overpaying...

• Are you due a discount? If you live alone (or just with children or students), are on a low income, have disabilities or have a live-in carer, you may be entitled to a council tax discount.
  
  Plus, many with conditions such as Alzheimer's or Parkinson's or who have had a stroke could be due a severe mental impairment reduction too.
   
  
• Are you in too high a band? 100,000s of homes likely pay too much due to this. Way back in 2007, I came up with my council tax check 'n' challenge system. Over the years many thousands have got in touch with successes, like Flip who tweeted: "@MartinSLewis We checked and have been reimbursed £2,460 after paying too much since 2005. It let us pay off a debt with a little left over."

1 April (ish): BROADBAND & MOBILES UP 5% to 9% (incl BT, EE, O2, Plusnet, Sky, Shell, TalkTalk, Three, Virgin and Vodafone)
Many of the 16 million who are out of contract across these sectors are due big price rises. Most hit around 1 April, some are already in place. If so, see this as an opportunity to check if you can get a better deal elsewhere. Millions can radically reduce their price and often improve what they get too.

• Broadband & line - halve costs. Most people out of contract pay £30 to £45/month. The cheapest deals come from short-lived sign-up incentives on price comparison sites, such as an Amazon voucher or money on prepaid Mastercards. Factoring incentives in over the contract, examples today include...
  
  

  Update Tuesday 29 March. The cheapest products have changed. Please use the MSE Broadband Comparison to find the latest deals - the price range is similar though.

  
  - Shell Energy: equivalent £14/month for 11Mb basic broadband & line
  - Shell Energy: equivalent £17/month for 63Mb fast fibre broadband & line
  - Full quick comparison: MSE Broadband, includes digital TV too
  
  
• Cut mobile costs down to £5/month. If you're happy with your handset, Sim costs are dirt cheap right now, for example, iD Mobile is '£5.50/month' for 12GB data plus unlimited calls and texts (it's on Three's network). For a full comparison and different networks, use the MSE Cheap Sim Finder or the MSE Cheap Handset Finder.
  
  

  Update Tuesday 29 March. The cheapest products have changed. Please use the MSE Cheap Mobile Finder to find the latest deals - the price range is similar though.

  
  
• Want to stick where you are? HAGGLE. If you're happy with your service, still use the comparisons above to benchmark the best deal. Then as long as you're out of contract, ask your firm to match them. Full help on how to do it in our Broadband haggling | Mobile phone haggling | Digital TV haggling guides.
  
  Do remember politeness and charm works best. We've seen huge successes with this recently, like Lorraine, who emailed: "Thank you Martin for all the encouragement. I eventually plucked up courage to ring Sky and am very pleased that I did. I am saving a massive £442/year."

1 April: ENERGY BILLS UP 54% (typically £700/year)

The electricity and gas price caps, which the majority of British homes are on, will rise a nightmarish 54% on 1 April. There's no total cap on the cost you pay though, it's more a cap on the rate you pay for what you use - see the new price cap unit rates & standing charges.

We're also now one month through the six-month assessment period for the October price cap, and I'm sorry to say the astronomical cost of wholesale energy, due to the Ukraine crisis, means that so far it looks like it will rise again by over 40%, taking a typical bill to £2,900+/year or more. Previously unthinkable.

Clearly political intervention is needed, I hope/guess the Chancellor will address this in his Spring Statement due to be held on 23 March.

• Time to fix? Watch / read transcript of my Is it time to fix? video from last week (I've added update notes to the top of it).
  
  
• Urgent tips for prepay, direct debit, and £150 council tax rebate. Watch / read transcript of my new Three quick energy tips video, which covers why many prepay customers should top up now, why direct debit customers should ensure they do a meter reading on 31 March, and how to ensure you get the £150 council tax energy rebate.
  
  
• Reduce usage, and help if you're struggling. A few more useful reads that may well help...
  
  - Our Energy saving tips provides quick usage wins.
  - Energy mythbusting, for example, 'cheaper to leave heating on low all day?'
  - In dire straits? See Energy bills - struggling to pay?

PS: While there's no deadline, petrol prices are at all-time highs too. See our Cheap petrol & diesel guide for a few options to try.

4 April: STAMP PRICES UP 12% - a way to beat it
1st class stamps will cost 95p (up 10p), 2nd 68p (up 2p). In past years, I've normally suggested you stock up on the stamps marked '1st' or '2nd' (not the price) to beat it, as they're still valid after the hike.

Yet new barcoded stamps are gradually being rolled out this year. You can still stock up on the current stamps and use them this year, but for them to stay usable after Jan 2023, you'll need to use Royal Mail's free stamp swap system it'll be offering to exchange them for barcoded ones. See Beat the stamp hike for full info.

1 April: WATER BILLS UP average 2% - Eng & Wales only 
The rise varies hugely by who your water firm is. While Northumbrian customers will see a hike of 10%, customers of South West Water will see their charges drop by 6%. There's little you can do if yours is being hiked, but many are overpaying £100s by not switching to a water meter (many aren't too). My rule of thumb is...

If so, use a water meter calculator to see if you'll save

The impact can be huge, as David emailed us: "My water bills were £1,200/year. I got a water meter and it brought them down to £550 [saving £650/year]. Well worth considering. Thanks."

If it's impracticable to have a meter fitted, don't give up. You can ask for an assessed measured charge. For more help, including 100,000s of water-saving FREEBIES, see our Cut water bills guide.

6 April: NATIONAL INSURANCE to rise 1.25% points  
For those earning over £190/week, national insurance contributions (NICs) - which are for all intents and purposes a tax - will rise.

- Employees' Class 1 NICs rate up from 12% to 13.25%
- Self-employed Class 4 NICs up from 9% to 10.5%
- Employee & self-employed NICs on over £50,270/year up from 2% to 3.25%

The NICs employers pay will rise too. There's little you can do about any of these. The Government says the rise is to pay for health and social care costs. See NICs rise explained. Related: Treasury changes NICs info after Martin Lewis calls it misleading.

1 April: NHS PRESCRIPTIONS likely to rise (Eng only) We're awaiting confirmation, but it is possible. There are two quick checks worth making.

• Do you need to pay? Some are exempt - check the NHS England tool.
  
  
• Are you one of 1m people overpaying as you don't use PPCs? Over 1m people from Apr 2020-Apr 2021 would've been better off using an NHS prescription prepayment certificate (PPC, or season ticket), which for a one-off fee means you don't pay for prescriptions for three months or one year. If you use more than one prescription a month on average, it's worth it.
  
  

With the tax year soon ending, you need to steal a March on April. There are many things that must be done now or it can cost you. I'll split it into two key areas, none of which are really about tax-planning, which is a whole other subject, I'll leave that to accountants...

1) The 'you can only claim back four years' deadlines

Many taxable areas allow you to backdate claims by up to four tax years (on top of the current one). So with a new tax year starting on 6 April, unless you act now, you lose the chance of claiming anything you're due from the 2017/18 tax year (6 Apr 17 - 5 Apr 18).

• TAX CODES: Urgently check if yours is correct. A tax code is a series of letters and numbers, for example 1257L, which tells your employer/pension provider what tax to deduct. Yet MILLIONS ARE WRONG and it is your legal duty to check.
  We warned a couple of weeks ago about checking your new code, which should have just arrived. Yet it's crucial to check past years too. You've only until Tue 5 Apr to get a refund for overpayments in 2017/18. Use our Free Tax Code Calculator.
  
  As Julie emailed: "I saw your item on tax codes and rang the tax office. I received a £700 rebate - never had a rebate in my life. Thanks for telling us."
  
  
• WORKING-FROM-HOME TAX BACK: Worth up to £280. During the pandemic, HM Revenue & Customs set up a 'microservice' that means even if you only had to work from home for one day, if you had increased costs due to it, you can claim the tax back for the whole year (previously, you could only claim for the days at home).
  
  You can still claim for both the 2020/21 and 2021/22 tax years. Yet there are (unconfirmed) rumours that things may soon revert to how they used to be, so if you haven't done it, go quick. Full help in my Working-from-home tax back blog.
  
  
• MARRIAGE TAX ALLOWANCE: Apply now or lose £230. If you are married or in a civil partnership (not just cohabiting), and one of you is a NON-taxpayer and the other pays tax at basic 20%, you're eligible for the marriage tax allowance (MTA).
  
  It lets the non-taxpayer transfer 10% of their tax-free allowance (so this year £1,260) to their spouse so they pay less tax (this year £252).
  
  It is backdatable for four years, meaning many are due a big amount. As Ian emailed us: "The transfer of some of my wife's tax allowance to myself has resulted in a £968 cheque, plus tax savings going forward. It was simple and the money is welcome during these difficult times. Many thanks."
  
  Crucially, if you were due it in 2017/18, don't delay or you'll lose £230. Once you've claimed you needn't claim again, as provided you're still eligible you can keep getting it.
   
• PPI TAX BACK. Had a payout? Claim tax back now. With successful PPI reclaims, you don't just get what you paid back - they must add 8% statutory interest on top. This extra counts as savings interest, but unlike savings, 20% tax is automatically deducted.
  
  As most needn't pay tax on savings, you can reclaim this. My Reclaim PPI tax blog takes you through it - but go quick if your payout was in the 2017/18 tax year. Elizabeth's email shows why it's worth it: "A cheque arrived for £399 within three weeks of submitting the claim. Thank you."
  
  
• UNIFORM TAX REBATE. If you wear a recognisable work uniform (for example, a branded T-shirt), and wash or repair it yourself, you can likely claim a tax rebate. And again, go quick to backdate it longer. Full help in our Uniform tax rebate guide.

2) The 'use em or lose em' ISA deadlines

Each tax year you're given a range of tax-free allowances. With the simplest, individual savings accounts (ISAs), you can't carry the allowance into the next tax year. And while 5 April is the deadline, in practice it takes time to get the money in, so if you've got the cash, get your skates on... 

• FIRST-TIME BUYERS: Fill up £4,000 Lifetime ISAs.
  Lifetime ISAs (LISAs) can be opened by UK residents aged 18-39, and give first-time buyers using it towards a home worth up to £450,000 (or those saving until age 60) a 25% bonus up to £1,000 a year on everything they manage to save.
  
  You can put up to £4,000/year in, so if you haven't filled it (or maybe haven't opened one), consider if it's worth it quick. Full help in our Top LISAs guide.
  
  
• PAY TAX ON SAVINGS OR INVESTMENTS? Consider an ISA. An ISA is a wrapper you can put around savings or investments, so they work like normal but you just don't pay tax on them. You're allowed to put in a total of up to £20,000 a year (including LISAs), and once it's in, it stays tax-free year after year.
  
  Cash ISAs have little use for most, as most can earn up to £1,000 a year of interest before it's taxed (see Personal savings allowance info), and top normal savings tend to pay better rates. Yet if you're a big saver or a very high earner, so you do pay tax on savings, you have until 5 April to use this year's allowance. See our full Top cash ISAs guide (also see Top junior ISAs).
  
  For investors, unlike savers, doing it within an ISA is usually a winner. More help is in our Stocks & shares ISAs guide.