NEW RULES FOR
THERE are some big changes coming in 2020 and they’ll affect everyone differently depending on their circumstances. Benefits are going up after five years of freezes and an increase to the state pension will make things a little easier for many. Others will lose out, with the over-75s having their free TV licence taken away next year and rail fare hikes hitting commuters’ pockets.
There’s a new £20 note coming our way, as well as the Brexit 50p which was twice scrapped when the date for the UK leaving the European Union was pushed back, first in March and then in October.
Here are some of the biggest changes in date order... 1. Rail fares increase 2.7% – January 1
It’s a case of new year, new price when it t comes to train fares – with an average rise of 2.7% coming.
There are some ways to get round it, though.
AJ Bell personal finance analyst Laura
Suter said: “To beat the hikes you can buy your season ticket in 2019 and pay this year’s prices, but that’s not an option if you’ve still got time left on your current ticket.
“You could also make use of your employer’s season ticket loan scheme, to cut ut the cost, or put the season ticket on a 0% interterest credit card to spread the cost across s 12 months, meaning you don’t have to start the new year by forking out thousands of pounds nds in one go.”
2. Mini-bond advertising banned – January 1
The Financial Conduct Authority (FCA) is banning the mass-marketing of mini-bonds to the general public from January 1.
The City watchdog said customers have been drawn in by claims of high interest, fixed over three to five years, but they can leave people with nothing at all if things go wrong.
Suter said: “Many of these providers offered interest rates of 8% or more and likened their returns to cash, meaning that people who have grown weary of their cash savings earning next to nothing were lured into investing.” 3. Brexit 50ps – January 31, probably
We get new 50p pieces with the date Britain leaves the EU stamped on them, but only when we actually do. So far they’ve made versions with March 29 and October 31 on them, then scrapped them, with the next date set at January 31.
MPs have now voted for this date, but the deal also needs to be cleared by the European Parliament – although this is expected to be simple. Of course, we’ve heard that before.
4. Broadband rules to make prices cheaper – February 15
New rules from Ofcom mean customers will be told when they come to the end of their contract, as well as about any changes in price at this point. Providers also have to tell customers about the best deal available at the time.
Suter said: “Any one of the 8.8 million people with broadband who are out of contract could see their bills cut next year.
“Ofcom has intervened to get those who don’t shop around a better deal, with providers pledging to cap rates for those out of contract and stop preferential rates being offered just to new customers.” 5. New JMW Turner £20 note enters circulation – February 20
After the launch of the polymer £5 and £10 notes, the Bank of England announced a shiny new plastic £20 would follow.
The current cotton note was first issued in 2007 and has Scottish economist Adam Smith on the reverse – it will be phased out over the year. The new one will be graced with the face of iconic artist JMW Turner and made of the same plastic as the current £5 and £10 notes.
The release date? February 20, 2020. 6. The right to request decent and aff affordable broadband – March 20
Some S areas of the country have the choice of slow slo broadband, hideously expensive broadband ban or no broadband. That’s set to end for many, ma with the introduction of new rights.
The Th new Universal Service Obligation will give giv people the right to request decent, affordable ab internet wherever installing it would cost no n more than £3,400 a household. 7. Minimum wage rise – April
We’re currently expecting a new rate of £8.67 for those aged 25 and over, up from £8.21 an hour now, but the exact figure can’t be confirmed yet.
New hourly rates for the following April a are typically announced in the Autumn Bu Budget, however Chancellor Sajid Javid called thi this year’s spending review off thanks to the Bre Brexit extension and the general election. The Bu Budget is now expected in February, when we can confirm the exact rise.
8. Inheritance generous – April 6
From April people will be able to pass on more of their wealth when they die, before tax is applied to it.
Inheritance tax breaks have been rising since April 2017 for people who own a home, and will hit £175,000 this year.
Suter said: “This means that including the standard nil rate band, a couple can leave a property worth £1m entirely inheritance taxfree.
“There are some tricky rules you have to stick to, so the property must be left to a child, grandchild or step versions.
“Those with very large estates won’t get the full amount, as anyone with an estate valued at more than £2m will lose the allowance by £1 for every £2 they are over this limit.” tax breaks get more 9. Landlord tax breaks finally axed – April 6
Over the past few years, landlords have seen some of their tax breaks whittled away. a
Previously, the money s spent on a mortgage could be taken away from earnings so you pay less tax.
E Effectively, it meant there w was a 40% discount for many on their mortgage payments. From April, that w will be cut to 20%.
10. Second homeowners face higher taxes – April
There are also new taxes for f people with more than one o house.
Suter said: “The Government has made three big changes to how the tax works when you come to sell this property.
“Firstly, many sellers will lose the ‘lettings relief ’ tax break, affecting how much capital gains tax you pay when you sell the property. Currently you get capital gains tax relief up to £40,000 per person (so £80,000 per couple) if you let out a property that was your home, but from next year this relief will only apply to landlords who are actually living in the property with their tenants.
“The next big change is to private residence relief, which currently means that any increase in the property’s value during the final 18 months that you own a property is not counted for capital gains tax purposes. However, from April next year that will be limited to nine months.
“The third change is that you will have to pay up for any capital gains tax you owe much more rapidly. Currently you just have to pay this bill by the end of the January in the following tax year, but from April you have just 30 days to pay the tax due on any gains from the sale of UK residential property.” 11. National Insurance – April
The Government promised to change national insurance thresholds in its manifesto.
Under their plans, you would pay no national insurance contributions on the first £9,500 of your earnings – up from £8,632 at the moment – working out as a saving of around £100 a year.
But it’s not quite the all-out win you might think – with the move meaning some of the worst-off might now miss out on some of their state pension as a result.
Steven Cameron, pensions director at Aegon, said: “Under current rules, those not paying any NI lose out on credits towards their state pension.
“Individuals need 35 years of qualifying NICs to receive the full state pension with those with fewer qualifying years seeing a reduction and receive none if they have fewer than 10 years of credits.” 12. Student loan repayments fall – April People paying back student loans get a minor tax break in April too.
Recent graduates will be able to earn £26,575 a year before payments kick in up from £25,725 this year. That should save them £76.50 in payments a year.
People who graduated between 1998 and 2011 will see their threshold rise too – from £18,935 a year to £19,390.