The new financial year is nearly upon us and with it come some major changes to your pay at work, benefits, pension, student loan repayment and much more.
This is not a complete list of the changes and we will be going into more detail on a number of topics over the next few week. But for now, here’s the most important things you need to know.
Let’s start off with some good news. If you’re working, you will see more money in your pocket.
From April 2018, the amount you can earn before you start paying tax will go up to £11,850 from £11,500. If you claim the standard personal allowance, the basic rate, the part of your income where you pay 20% tax will also go up to £46,000.
Things get a bit more complicated in Scotland, where the Scottish government has used its tax-setting powers for the first time.
The personal allowance stays the same as in the rest of the UK. If you live in Scotland (even if you work in England) you will now pay a starter rate of income tax of 19% on income between £11,850 and £13,850 and a basic rate of 20% up to £24,000.
If you earn between £24,000 and £43,430, you will pay an intermediate rate of 21% and a higher rate of 41% on incomes up to £150,000. The top rate of tax over this will be 46%.
Stamp duty in Wales
Speaking of new taxes, if you’re buying a house in Wales you will now pay Land Transaction Tax (LTT), rather than Stamp Duty.
There will be nothing to pay on the first £180,000 of a property and 3.5% up to £250,000.
Unlike Stamp Duty, there is no discount for first-time buyers.
If you’re earning minimum wage, or are an apprentice, you will also start to see your pay packet increase.
The National Minimum Wage is going up to £7.83/ hour from £7.50/ hour. Apprentice rates also go up to £3.70/ hour from £3.50/ hour.
If you’re claiming your state pension, and have made full National Insurance contributions, the amount you get will go up to £164.35 a week.
If you have a personal pension, the lifetime allowance, the point at which you get hit with an extra tax charge, goes up to £1,030,000.
If you’re paying into most ISAs, the savings limit remains at £20,000 a year. But, there is a slight increase in the Junior ISA limit, which goes up to £4,260 from £4,128.
The benefit cap remains in place, so there is no change for the majority of benefits, including Universal Credit, Jobseekers Allowance and Employment and Support Allowance.
If you’re claiming Housing Benefit and move to Universal Credit, from April 2018, you will continue to get your Housing Benefit for the first two weeks of your Universal Credit claim.
Some benefits are going up, including Carer’s Allowance, Incapacity Benefit and Personal Independence Payments.
Both Working Tax Credits (WTC) and Child Tax Credits (CTC) are largely remaining the same. The only increases are if you, or your child, have a disability.
If you’re currently repaying your student loan, the amount you have to earn before paying anything back is going up.
Older students, who are repaying under Plan 1, will not pay anything back until they’re earning over £18,330 a year, up from £17,775.
Newer students, who paid higher university tuition fees, will not start paying loans back until they’re earning over £25,000 a year, up from £21,000.
If you get dividends from shares, your tax-free dividend allowance will drop from £5,000 to £2,000.
The cost of a TV licence is going up from April by £3.50 to £150.50 a year.