There are 24 new laws and financial changes coming in April

Since the outbreak of coronavirus, we have all experienced some major changes in our lives one way or another – and just as the start of a new tax year often comes hand-in-hand with expensive new rules, this year will be no different.

From next month, council tax, utility bills and mobile phone charges are all set to rocket, as inflation-linked hikes come into force affecting millions of households, according to the Mirror.

On top of this, there will also be many law changes impacting everything from employment rights to pension contributions, savings and house purchases.

The Mirror reports that elsewhere, benefits are rising, while extra rules will come in to help you use your money better.

Below we look at the major changes that are set to kick in just four weeks from now.

New government-backed guarantor mortgages

From April, 95 per cent of mortgages will return in the form of a new government-backed scheme.

Chancellor Rishi Sunak announced guarantor mortgages in his March 3 Budget, promising to turn ‘generation rent’ into ‘generation buy’.

The Government said it hopes to lure lenders back into the low-deposit market by offering to back buyers and compensate banks or building societies if a person is unable to meet their repayments.

While its success remains to be seen, Lloyds, Barclays, Santander and HSBC have already signed up to the initiative which should, in theory, offer a boost to house movers and first-time buyers.

It comes alongside an extended stamp duty holiday which will now run until the end of June.

All purchases up to £500,000 will continue to be tax-free, with a further extension on homes bought up to a value of £250,000 until the end of September – benefiting second movers.

Rightmove estimates that the average stamp duty saving in England is £5,802.

Car Tax

The Chancellor may have frozen fuel duty for the tenth year running, but drivers face a raft of new changes from April.

VED, often called road tax, is rising in the new tax year which means you’ll have to pay more to keep driving your car.

As before, the amount of tax you’ll pay will depend on your new car’s CO2 emissions. Those that emit zero grams per kilometre of CO2 will pay zero, while petrol- and most diesel-powered drivers (including hybrids) that emit between 1g and 50g per kilometre will pay £10 for the first 12 months.

Cars that emit between 51g and 5g per kilometre will continue to pay £25 for the first year.

However, cars that emit between 76g and 150g per kilometre of CO2 will see their VED rates rise by £5 this year – to £220.

The standard rate – the amount you pay after the second year – for cars registered on or after April 1, 2017, will be £155 a year for anything other than zero-emissions vehicles.

‘Benefit in Kind’ rates

Benefit in Kind (BiK) rates were scrapped completely in March 2020 to encourage electric car usage, specifically through the use of salary sacrifice schemes.

However, they’re now back and as of April, drivers may have to pay as much as £390 per year to use their vehicles due to BiKs reintroduction.

A 1% charge, based on income rates and vehicle value, could find many drivers with zero-emission models caught out, a charge that will likely increase to 2% in 2022.

However, while this is hardly likely to be welcome news to motorists, BiK rates are still way below what they were back in 2019 when they were at 16%.

Driving lessons and theory tests

Driving lessons are set to resume next month.

In England, learners are included in Step Two of the Government’s restart roadmap, which means that driving lessons are scheduled to start again on April 12.

On April 12 in England, theory tests, motorcycle tests, LGV driving tests and car and trailer driving tests will also resume.

From April 22, at the earliest, car driving tests will restart in England subject to Covid vaccination targets and whether new Covid variants are under control.

Help-to-buy changes and shared ownership

The current Help-to-Buy scheme – which offers extra money up front to buy new-build homes with just a 5 per cent deposit – is ending on March 31, although buyers have not been allowed to apply for it for several months now.

Under the new scheme – which is now live – only first-time buyers can get involved, while the loans are capped at 1.5 times the average first-time buyer home in that area – rather than a national limit.

There are also changes to mortgage rules and how much of a loan you can be given. You can see all the new Help-to-Buy rules and how it all works here.

Shared Ownership is also changing. In its current form, the minimum share a buyer can purchase in a home is 25%, however, the government’s new model for the scheme will see this lowered to 10% at the end of March.

Council tax increase

Almost all households will see their council tax bills rise from April, with two thirds of local authorities set to increase rates by the maximum amount – 5 per cent.

The Office for Budget Responsibility (OBR) said councils will increase the levy by £1.8 billion after the Government gave them the go-ahead to introduce hikes of up to 5 per cent.

That will mean increases of between £50 and £100 for band D properties, which paid an average of £568 in 1993 compared to £1,817 this year.

Sarah Coles, personal finance expert at Hargreaves Lansdown, said: “Unfortunately it’s not the only bill that will be creeping up, and £10 here and there will really add up. It’s why it’s worth making a list of these regular outgoings, and revisiting it once or twice a year.”

If you’re retired, live alone, are on benefits or are disabled, you may be able to escape the council tax hike or pay a lower rate.

Millions of people may also be on the wrong tax band. If you act now, you may be able to escape the rise entirely.

State pensions rise

While others will see tiny increases in wages and benefits, or no increase at all, the state pension will rise 2.5 per cent.

That brings it to £179.60 a week for people with full credits on the new-style pension.

The rise is a result of rules saying pensions are guaranteed to rise by at least this – or by inflation or average wages if they have bigger increases.

Aegon’s Cameron said: “The confirmation the triple lock was staying was a relief to many pensioners, but it comes at a considerable cost to those of working age who fund it through their National Insurance.

“We expect more debate around whether it can survive in its current form for another year.”

Minimum Wage

Millions of people will see their wages rise on April 1, when the new minimum wage rates come into force in England.

Basic rate workers will get a 2.2 per cent increase, Rishi Sunak said, with the National Living Wage rising to £8.91 an hour.

Chancellor of the Exchequer, Rishi Sunak outside 11 Downing Street
Chancellor of the Exchequer, Rishi Sunak outside 11 Downing Street
(Image: Aaron Chown/PA Wire)

For the first time, the government’s highest rate will also include those aged 23 and over – workers who previously fell under the lower wage bracket.

This means 23 and 24-year-olds who are currently on £8.20 an hour will see their pay jump by 71p to £8.91 next month.

On average, it equates to a pay rise of just 19p an hour for basic-rate workers.

Statutory sick pay

Statutory Sick Pay (SSP) rates are changing from April 6.

The amount you need to earn to qualify will remain at £120 a week, however the payments will rise to £96.35 a week.

Family leave and maternity pay

Similarly, the rate of pay for maternity, paternity, adoption and shared parental pay is also increasing to £151.97 a week from next month.

Family-friendly payments usually increase from the first Sunday in April – April 4 this year.

Tax allowances and thresholds

The amount you can earn before having to pay income tax – known as your personal allowance – is rising to £12,570 on April 6. The starting point for higher earners (40 per cent tax payers) will jump to £50,000.

It means a few more pounds in your pocket – but in the long run, most people won’t be better off.

That’s because the thresholds are set to be frozen for five years from April.

It means those who get a pay rise between now and 2026 may end up in a new tax bracket – and as a result pay more tax.

The Government’s official forecaster said this would mean 1.3 million more people paying income tax and one million more paying the higher rate of tax in the long run.

Marriage allowance

The Marriage Allowance allows anyone with an income of £12,500 or less to transfer up to £1,250 of their Personal Allowance to their husband, wife or civil partner – if their income is higher.

This means they get a tax break – worth around £250 a year.

Claims can currently be backdated up to four years – meaning you can claim as far back as 2017 right now – totalling £1,150 back.

But this will change to 2018 at the earliest with the new tax year. If you were married in that year, it’s your last chance to make a claim.

Energy price cap

Around 11 million households face a near £100 energy price hike from April.

That’s because the new energy price cap level comes into force – the maximum amount energy firms can charge households on standard variable tariffs – often the most expensive deals in the market.

On April 1, the cap will rise to £96 – taking the average bill to £1,138 a year.

It will rise to £87 a year for those on prepayment meters.

Advance universal credit payments

Universal Credit advance payments are also changing next month – and it’s good news.

These advances currently have to be paid back in instalments over 12 months – but that repayment period is set to increase to 24 months.

Deductions are currently capped at 30 per cent of the standard allowance, but this will reduce to 25 per cent.

The measures will now come into force from April instead of October.

You don’t need to worry about hidden costs
(Image: SHARED CONTENT UNIT)

Working tax credits

Brits on working tax credits will get a £500 one-off payment to help them through the ongoing Covid crisis.

Rishi Sunak said that because of the way that the working tax credits system works, people will not be able to get the extra weekly £20 given to Universal Credit claimants from April.

Child benefit is rising

Child benefit is rising to £21.15 per week for the first child and £14 per week for subsequent children from April 12.

This is an increase of 10p and 5p respectively per week and means the new monthly payments will be £84.60 for an eldest or only child and £56.00 for any additional children.

The payment comes through every four weeks on a Monday or a Tuesday and the claimant will also be awarded national insurance credits which can count towards their state pension.

However, if a claimant or their partner earns more than £50,000 a year, a fraction of it must be repaid at the end of the tax year.

This is at a rate of 1 per cent for every £100 earned over £50,000. If over £60,000 is earned in a year, the whole amount must be repaid.

Universal Credit

Universal Credit is rising slightly next month on top of the £20 uplift extension.

For those single and aged under 25, the standard allowance will rise from £256.05 to £257.33.

Those single and aged 25 or over will see the standard allowance rise from £323.22 to £324.84.

It looks like there is good news on the horizon for people on Universal Credit

For joint claimants both under 25, the standard allowance will rise from £401.92 to £403.93.

Universal Credit claimants can also get a boost if they are caring for a severely disabled person for at least 35 hours a week. The amount you get a month will rise from £162.92 to £163.73.

Disability living allowance

The highest amount you can claim in Disability Living Allowance is rising to £89.60 (from £89.15).

The middle amount is rising to £60.00 (from £59.70) and the lowest amount is jumping up to £23.70 (from £23.60).

Employment and support allowance

Employment and Support Allowance for under-25s is rising to £59.20 (from £58.90) while those aged 25 and over will see their payments rise to £74.70 (from £74.35) from April.

Housing benefit

Housing benefit is rising to £59.20 (from £58.90) for under 25s and to £74.70 (from £74.35) for 25s and over next month.

Those entitled to main phase ESA will get £74.70 (up from £74.35) from April 6.

Pension credit

Pensions credit is designed to help people in retirement have a decent standard of living.

From April, payments are rising to £177.10 from £173.75 – with the rates rising even further if you are a carer.

Personal independence payment

The Personal Independence Payment (PIP) daily living component is rising to £89.60 (from £89.15) for enhanced claimants and £60 (from £59.70) for standard claimants.

The Personal Independence Payment mobility component is rising to £62.55 (from £62.25) for enhanced and to £23.70 (from £23.60) for standard payments.

NHS prescription charges

NHS prescription charges in England will rise to £9.35 on April 1.

The price of a three-month PPC will become £30.25 (an increase of 60p) and a 12-month PPC will be £108.10 (an increase of £2.20).

TV licence

The cost of the annual TV licence fee will rise from £157.50 to £159 on April 1.

The Government is responsible for setting the level of the licence fee and announced in 2016 that it would rise in line with inflation for five years from 1 April 2017.

The new cost equates to 43p per day, according to the broadcaster.

Devon Live