Changes which may affect your household budget in 2018
April marks the start of the new financial year, bringing new rates for wages, changes to benefits and tax, and pensions.
In the last 12 months, Citizens Advice Shropshire helped around 2,500 people with money queries, ranging from guidance on benefits, pensions and pay, to budgeting and shopping around for the best deal.
Now we’re encouraging people to see whether the upcoming changes will affect their household finances, so they can plan their money accordingly.
Jackie Jeffrey, Chief Officer of Citizens Advice Shropshire said:
“Keeping on top of changes that can affect your finances is one of the key ingredients to managing your money today and planning for tomorrow.
“It’s important to get to know which new rules will apply to you, and the difference they could make to your budget. For example, Shropshire’s Council Tax Support Scheme is changing and from 1st April and people on benefits including, but not limited to, Jobseekers Allowance, Employment and Support Allowance and Universal Credit could have to pay 20% of their annual council tax bill for the first time, a cost of around £20 a month.
“Weighing up different changes can be complicated and if you’re not sure whether you’re affected or how, Citizens Advice can help. We can also help you build your money skills, from making use of technology to track your finances to working out how different deals compare.”
What you need to know about the changes coming in April
Income
- The National Living Wage for people over 25 will rise from £7.50 to £7.83 on 1 April. There are also increases to the national Minimum Wage for younger workers. You can find out your minimum wage rate here.
- From April 2018, the standard rates of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay will rise from £140.98 to £145.18 per week (or 90 per cent of the person’s average weekly earnings if lower).
- Support for Mortgage Interest (SMI) becomes a loan, and will be secured on your property and will incur interest.
- Some benefits are frozen for another year and with Inflation high this means that welfare benefit payments will be worth less in real terms.
Taxes
- From 6 April, the personal allowance will rise from £11,500 to £11,850. This means you’ll only pay tax on earnings over £11,850.
- The higher rate tax threshold will also rise from £45,000 to £46,351.This means that you’ll only pay higher rate tax (40%) on earnings above £46,351.
- Council tax in Shropshire will rise by 5.99% on 1 April.
- Changes to who is eligible for Council Tax Support in Shropshire on 1 April means some people who didn’t have to pay council tax in 2017/18 will now have to pay 20% of their council tax.
Pensions
- The state pension will rise by 2.5% on 6 April 2017. For people who reached retirement after April 2016, this will rise to £164.35 a week and £125.95 for anyone who retired before April 2016. Don’t forget you can access free, impartial pensions guidance, from Pension Wise if you’re aged 50 or over.