New tax year, new bills
Most state levies and utility bills are rising further in 2024-2025
It’s the beginning of a new financial year, which will mean several changes to your finances. Let’s start with your taxes. National Insurance is being cut from 10% to 8% from 6 April. This will save £450 a year for an employee on the average salary of £35,000. If you are self-employed, your National Insurance bill will fall from 8% to 6%, saving £350 a year for someone on the average self-employed wage of £28,200. However, the allowance for capital gains tax (CGT) is being halved in 2024-2025. From 6 April you can only make £3,000 a year in profit from selling assets before CGT is due. The dividend tax allowance is also being cut, from £1,000 to £500. Road tax is being hiked from 6 April, and will be around £10 a year dearer on average. The duty charged on standard airline tickets is going up by £1 on domestic flights and £3 for mid-haul flights (those lasting four to eight hours). Charges won’t change on European flights, but long-haul flight duty will go up by £22.
A council-tax shock
The biggest tax shock is local. If you live in England your council tax will rise by 5.1% this month. That adds £106 a year to the average bill. In Wales the average council tax bill will go up by 7.7%. In Scotland council tax bills are frozen for most households. Councils can normally only raise their bills by up to 4.99% a year. The average has climbed to 5.1% because some local authorities, including Birmingham and Woking, have been allowed to increase council tax by up to 10% after declaring themselves bankrupt.
Now for your other bills that are changing this April. The worst affected are broadband and phone bills. BT, EE, Three and Vodafone are increasing prices by December’s inflation rate plus 3.9 percentage points – so that’s a 7.9% rise for customers. TalkTalk adds a slightly smaller amount, so their increase is 7.7%. O2 and Virgin Media use the higher retail price index (RPI) to calculate inflation and add an extra 3.9 percentage points, so you get a price rise of 8.8%. Your television licence, meanwhile, will go up by £10.50 to £169.50 a year. It’s good news for energy bills. The price cap is falling to a two-year low and the average household will save £238 taking their annual bill down to £1,690. But the cap is on the unit price, not the total bill. So, if you use a lot of energy your bill will be more than £1,690. While your energy costs may fall, expect an average rise of 6%on your water bills in England and Wales. In Scotland the figure is 8.8%. If you haven’t got a water meter, check if one will save you money.
If you live in England and are registered with an NHS dentist in England your treatment costs are rising by 4%, so a check-up will now cost £26.80. Finally, pensioners get an 8.5% increase to their state pension. If you get the full state pension you will now receive £11,502 a year. If you get the older, basic one your weekly amount will go up from £156.20 to £169.50.