Major April money changes coming in from payment boosts to water bill hike

A host of significant financial changes will come into effect from April 1, marking the start of the new fiscal year.

Increases to benefits, State Pension and National Minimum Wage will be implemented next month, along with several price hikes including energy bills, water bills and Council Tax. Many of these changes will occur once the new tax year commences on April 6, but some will take effect a bit earlier from the beginning of the month, reports the Express.

It's possible to circumvent some of the price increases due in April, so it's worth investigating now if you can offset any upcoming additional costs.

Here are 10 major financial changes coming in April that will affect household budgets:

National Living Wage - April 1

The government has announced a 6.7% increase to the National Living Wage from April 1. This pay rise will equate to £1,400 per annum for an eligible full-time worker, with those aged over 21 seeing their hourly rates climb from £11.44 to £12.21.

The National Minimum Wage for 18 to 20 year olds is also set to rise by £1.40 from £8.60 to £10.00 per hour - a record increase which means full-time younger workers eligible for the rate will see their pay boosted by £2,500 a year.

The minimum hourly wage for an apprentice will also go up from April, with an 18 year old apprentice witnessing their minimum hourly pay increase by 18.0% - a pay bump from £6.40 to £7.55 per hour.

Water bills - April 1

From April 1, households in England and Wales will see an average increase of £123 in their water bills, marking a 26% hike. This is to fund upgrades in the water sector, with smaller percentage increases expected over the next four years.

Regulator Ofwat has announced plans for further price rises over the next five years, allowing water firms to increase average bills by £31 per year, or £157 in total, reaching £597 by 2030. However, some regions will face steeper hikes than others, with Southern Water increasing bills by 47%, while Anglican Water and Northumbrian Water are only rising by 19%.

Martin Lewis suggests that households could potentially save hundreds of pounds by switching to a water meter, as this would mean paying only for what you use. He advises following his "rule of thumb" that if your home has more bedrooms than people - or the same number - then you "almost certainly should be using a water meter".

Energy bills - April 1

Meanwhile, annual energy bills for households on a standard variable tariff in England, Wales and Scotland will rise by an average of £111 from April 1. This comes as Ofgem increases its price cap from £1,738 per year to £1,849, marking a 6.4% hike in energy costs and affecting around 22 million homes.

The price cap determines the maximum rate per unit and standing charge that energy suppliers can impose on customers for their energy consumption - it doesn't dictate the total bill. Therefore, those who consume more energy will inevitably pay more.

Standing charges, which are fixed daily fees for connection to a gas and electricity supply and vary by region, are also set to rise again for gas but will decrease for electricity, although this depends on your location.

However, it's possible to outsmart the April price cap by switching tariffs and securing a cheaper rate. Experts are encouraging consumers to start hunting for better deals now to safeguard against further price hikes.

Broadband and mobile phones - April 1

From April 1, the majority of customers who entered into a broadband or mobile phone contract on or before April 10, 2024, will face a 6.4% increase. This is based on the inflation rate from last December plus an additional charge.

Council Tax - April 1

Council tax bills will also see a rise of 5% from April 1 for the third year running as nearly all councils hike their bills up to, or close to, the maximum allowed.

This year, the average annual band D bill (the standard measure of council tax) will be £2,280 including all precepts, marking an increase of £109 compared to last year.

A staggering 293 out of 384 lower and upper-tier councils, subject to referendum principles (which allow them to raise the levy by 4.99% without triggering a local referendum) are set to push their council tax up to the limit, with 56 others teetering close to the cap. This means that 91% of these councils are feeling the squeeze, leading to substantial rate hikes.

TV Licence - April 1

From April 1, households will need to dig a bit deeper into their pockets as the cost of a TV Licence sees a rise of £5, nudging the yearly fee from £169.50 to £174.50. Even owners of black and white televisions aren't escaping the increase, with costs going up by £1.50 to a new price of £58.50.

Stamp duty - April 1

On the same day, potentially higher outlays loom for some property buyers due to changes in stamp duty. First-time buyers will notice the "nil rate" band shrinking from £425,000 to £300,000, while other purchasers will face a band reduction from £250,000 down to £125,000.

Stamp duty, being the tax levied on property purchases in England and Northern Ireland, is based on a percentage of the property's cost. Consequently, any deals closing post-April 1 are subject to these raised stamp duty rates, spelling additional thousand-pound expenditures for homebuyers.

Benefits uplift - April 6

Come April 6, beneficiaries should anticipate uplifts in their benefits. From April 6, 2025, benefits and tax credits linked to inflation will increase by 1.7%, in line with the Consumer Prices Index (CPI) rate of inflation for September 2024. This will provide UK households with an additional amount of money in their bank accounts.

The increase applies to working age benefits such as Universal Credit, Personal Independence Payment (PIP), Attendance Allowance, and Employment and Support Allowance (ESA), among others.

On April 6, both the basic and new State Pensions will be uprated by 4.1%, in accordance with the annual rise in the average weekly earnings index from May to July 2024. The increase in your pension payments from April 6 will depend on when you retired, as the State Pension system is divided into two schemes - basic and new.

Men born before April 6, 1951, and women born before April 6, 1953, who receive the basic State Pension, will see their pensions rise by 4.1% from £169.50 per week to £176.45 - a weekly increase of £6.95. Those claiming the new State Pension will also experience a 4.1% increase in their payments, with the full rate going up from £221.20 per week to £230.25.

Stamp prices will once again increase on April 7, marking Royal Mail's sixth price hike in three years. The cost of a first-class stamp will rise by 5p to £1.70, while second-class stamps will increase by 2p to 87p.