From tax cuts to travel price hikes, changes are coming thick and fast in 2024.
We’re running through what’s happening and when, so your finances can weather the storm.
January has seen National Insurance fall and energy bills rise
- The energy price cap rose on January 1st. This raised the average household’s bills by £94 a year.
- National Insurance Contributions (NICs) were reduced from 12% to 10% on January 6th. 27 million employees will benefit from this change, with the average basic-rate taxpayer £304 per year better off.
- The deadline to submit your online tax return and pay your bill for 2022/23 is January 31st. If you make payments towards your tax bill for the current tax year “on account” you’ll have a payment for this due, too. If you’re late filing your return or paying your tax bill, you could be fined.
In February, the last Cost of Living Payments are landing
- Households on means-tested benefits will receive a Cost of Living Payment. This payment, worth £299, is the last Cost of Living Payment in the package of support the government announced last year. It’ll land with the eight million people eligible for it between February 6th and 22nd. If you’re entitled to this payment, you’ll receive it automatically. There’s no need to apply.
- The base rate may change. The Bank of England’s Monetary Policy Committee (MPC) meets every six weeks to decide whether to change the base rate. The base rate is important because it influences loan and savings interest rates, particularly mortgages. The MPC’s first meeting in 2024 is on February 1st.
March brings with it price hikes across transport
- Rail fares will increase by up to 8% on March 3rd. So, if you have any train travel coming up, buy your tickets in advance. If you buy them before the price hike, you could secure a cheaper deal.
- Fuel duty (and therefore pump prices) will rise by 5p per litre of petrol or diesel from March 23rd. This will end a two-year “temporary” cut to rates.
April is the biggest month of the year financially, with LOTS of changes
April is the start of the new tax year, so it’s a big month for your money. There are lots of changes coming on April 1st and throughout the month that will affect your finances:
- The National Living Wage is increasing to £11.44 per hour and is being extended to cover all workers aged 21 and over, instead of 23.
- The State Pension and Universal Credit are both rising. Universal Credit is increasing by 6.7%, while the State Pension will rise by 8.5% thanks to the triple lock. These changes come into effect on April 8th.
- Class 2 NI contributions are being scrapped, representing a saving of more than £1,000 per year for the self-employed. The main NI contribution rate for the self-employed is being reduced by 1% as well.
- Working parents with two-year-olds will get 15 hours of free childcare per week as the government expands this scheme to cover younger children.
- Broadband, mobile phone, and other bills may rise. Look out for communication from your providers about this to find out how you’ll be affected. If you’re out of contract, it could be a good time to shop around for a cheaper deal!
- TV licences are rising by £10 per year. This means the cost of a standard colour TV licence will be £169.50 per year, up from £159.50.
- Car tax (vehicle excise duty) will increase. The majority of vehicles registered since April 1st 2017 will incur a standard, flat rate charge of £190. This is an increase of £10 compared to 2023/24. Older vehicles may incur much higher charges, depending on their carbon emissions.
- Council Tax will increase, too. How much you pay depends on where you live and which Council Tax band your home falls into. Your bill shouldn’t rise by more than 5% without your local council holding a referendum.
- NHS prescription charges are also set to rise at the start of April. How much they’ll change by will likely be announced in March, so keep your eyes peeled closer to the time.
- The energy price cap will change again and is expected to fall on April 1st. The new cap will be announced at the end of February. It’s expected to be lower than the price cap for January to March.
- ISA changes will give savers more flexibility to move money between different ISA accounts of the same type during the tax year. For example, if you have two cash ISAs, you’ll be able to move money between them without it affecting your tax-free savings allowance. This change kicks in at the start of the new tax year on April 6th.
There are no big changes coming in the summer - yet
- The energy price cap will change again on July 1st. What it will be set at will be announced in May. It’s currently too soon to predict whether it’ll be higher or lower than April’s cap.
More free childcare hours will be available in September
- Working parents with children aged 9 months to 2 years will get free childcare hours. This is the second stage of the free childcare scheme expansion. It’ll allow working parents with children over 9 months old to claim 15 hours of free childcare per week from September 1st.
Then, we wind down for winter
- The energy price cap changes for the last time in 2024 on October 1st. Where the cap will be set will be announced at the end of August.
With careful planning, 2024 could be a good year!
With wage increases and tax cuts both on the way in 2024, many are quietly optimistic for the year ahead. But it will still take careful planning and budgeting to successfully navigate the changes that are on the way. While incomes are rising, so are some costs. It’s important to factor these into your budget in advance so that you’re not left short when the price hikes kick in.
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