Every April, the new tax year rolls around and brings changes to our personal finances. See how the new laws might have affected you.
There are a number of ways your finances might have changed for the new financial year. We’ve broken them down and explained what they could mean for you.
1) More money in your pocket
This April, the tax-free personal allowance has risen from £11,850 up to £12,500. This means that you’ll now earn £12,500 before you have to pay any tax. So you’ll enjoy a bit more tax-free cash this year!
This is the same in Scotland, although the tax brackets are a little different. If you earn between £12,500 and £14,549, you’ll be taxed at the starter rate of 19%.
Earn from £14,549 to £24,944 and you’ll pay the basic rate of 20%, while you’ll pay 21% on earnings from £24,944 to £43,340. Phew, that was a mouthful!
2) Married couples can share more cash
If you’re married or ready to tie the knot soon, you’ll be pleased to know that you can share more tax-free cash with your other half.
Thanks to the increase in the tax-free personal allowance, married couples can transfer up to £1,250 into the lower earner’s name, saving couples up to £250 a year.
This is aimed at couples with one breadwinner and the other earning less than the personal allowance (£12,500). Head over here to apply for this benefit.
3) You could get a pay rise
Do you earn the national minimum wage? If so, you’ll have received a pay rise this April.
Those of us over 25 will pocket an extra 38p per hour – from £7.83 to £8.21 per hour. If you’re aged 21-24, your hourly wage will have increased from £7.38 to £7.70.
And for those aged 18-20, you’ll see an increase of 36p, from £5.90 to £6.16.
4) You could pay more council tax
Unfortunately, it’s not all sunshine and rainbows. From April, council taxes will rise by at least 2.5% in certain areas.
You might have seen a change in your bills at the end of March, so you might already be clued up with how much council tax you’ll be paying this year. You can check out what council tax band you’re currently living in here.
Remember, if you don’t think yours sounds quite right – like if your neighbours are paying something else – you’re welcome to dispute it.
5) More money in the pension pot
If you currently have a workplace pension, you may have automatically started to stash more cash away for your retirement fund.
As of 6 April, your minimum contribution rose from 3% to 5% of your earnings. While this takes away more of your monthly salary, the good news is that your employer will also increase their contribution – from a minimum of 2% up to 3%.
For more information about any of these changes, head over to GOV.UK.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.