All the key financial changes affecting millions of people in April

April is a month of financial change bringing with it energy price hikes, a rise to benefits delivered by both the Department for Work and Pensions (DWP) and HM Revenue and Customs (HMRC), increases to the National Living Wage, Council Tax and National Insurance Contribution deductions.

But there’s a lot more happening this month including a £150 Council Tax Energy Rebate for all Scottish households in bands A to D, plus those on higher bands already receiving a reduction on their annual bill.

As the cost of living crisis continues to put even more pressure on household finances, here are the key changes coming in April you need to know about to help you plan your budget.

Stamps

Earlier this year, Martin Lewis highlighted that from January 31, 2023, millions of Royal Mail first or second class stamps with the Queen’s head on them will be replaced by ones that contain a barcode alongside it.

The consumer champion explained how from March 31, anyone who has any of these stamps will be able to swap them for the new barcoded versions.

This initiative, which Royal Mail has dubbed the ‘Swap Out’ scheme, starts today and will close on March 31, 2023.

To swap them over, Martin explained: “You can get a form on the Royal Mail website or you can call it or go somewhere that has Royal Mail delivery, but bizarrely, you can’t do it at the Post Office – which I think needs to change – and then you need to post your tamps off and they’ll send you replacements.”

It’s also worth noting that first and second class stamps will go up in price from April 4.

First class stamps will cost 95p, 10p more than the current price, while second class ones will rise by 2p to 68p.

Energy bills increase

Millions of households are bracing themselves for the impact of Ofgem’s 54% price hikes which start on April 1 and the only realistic way to keep costs down as much as possible is to reduce your usage – not an easy task, but hopefully, with the better weather coming this will help mitigate the soaring costs we are all expecting.

From Friday, the energy price cap will rise from £1,277 to £1,971 for a household on a standard tariff with typical, average usage – an increase of £693 per year.

Prepayment meter customers will see a rise of £708 from £1,309 to £2,017.

Ofgem’s energy price cap is the maximum amount a firm can charge customers on a standard tariff each year for the amount of electricity and gas they use – this prevents the from charging higher costs to help them meet the wholesale prices.

Council Tax bill increase

New Council Tax bills for 2022/23 have been issued and eligible customer for the £150 energy rebate should have been contacted by their local authority to inform them how this will be paid.

Feedback on the Daily Record Money Saving Scotland Facebook group is that this is either being deducted from the annual bill or added as a credit to the account, only a couple of people have said they received the money directly into their bank account.

If you’re not sure if you’ve received it and you’re in bands A to D, or currently receive a discount/reduction – contact your local council.

National Insurance Contributions are rising

From April 6, employer and employee National Insurance contributions will be put up, with the rate going back to its 2021/22 level the following year, and the income stream replaced by a new health and social care levy of 1.25%.

The proposal is predicted to raise £12 billion annually and will be spent on the NHS, Health and Social Care Levy across the UK.

How much will I pay under the new plans?

The amount of NICs you pay depends on your salary, however people earning under £9,568 don’t have to pay National Insurance and won’t have to pay the new levy.

Salary and new National Insurance Contributions

• £20,000 – will pay an extra £130 a year (£10.80 per month)
• £30,000 – will pay an extra £255 a year (£21.25 per month)
• £50,000 – will pay an extra £505 a year (£45.80 per month)
• £80,000 – will pay an extra £880 a year (£73.33 per month)
• £100,000 – will pay an extra £1,130 a year (£94.16 per month)

You can read more about the changes to NICs in the new Build Back Better: Our Plan for Health and Social Care document on the GOV.UK website here.

National Living Wage increase

The National Living Wage is the UK Government’s set minimum rate, that employers must pay staff aged 23 and over for each hour worked.

This means that if you’re over 23, you are legally entitled to be paid the National Living Wage.

The National Living Wage is currently £8.91 an hour – but will rise by 59p to £9.50, the equivalent to a six per cent increase.

This amounts to an extra £1,074 a year before tax, or £90 each month.

Chancellor Rishi Sunak said that the rise will “benefit over 2m of the lowest paid workers in the country”.

National Minimum Wage increase

If you’re under 23, you are only entitled to the National Minimum Wage.

Wage increases from April 1:

• Apprentice – £4.81
• Under 18 – £4.81
• 18 to 20 – £6.83
• 21 to 22 – £9.18
• 23 and over – £9.50 (National Living Wage)

Water bills rising

In Scotland, water and sewerage prices depend on your Council Tax band and are covered by what’s called a ‘combined service charge’, reports Mirror Online.

Households in Scotland will see these water and waste charges increase by an average of 4.2% from April.

Post Office Card accounts closing

HM Revenue and Customs (HMRC) has been warning customers for more than a year that Working Tax Credits, Child Tax Credits, Child Benefit and those claiming Guardian’s Allowance will no longer have benefits paid into a Post Office card account after April 5.

More than 6,800 customers have still to contact the relevant department and make alternative arrangements for payments – all you have to do is give them your new account details.

Anyone who hasn’t submitted new account details by April 5 will see their payments paused – find out more about this here.

Social Security Scotland benefits going up by 6%

The Scottish Government will increase the Scottish Child Payment from £10 per week to £20 from April 1.

There are also several other increases to devolved benefits, but the new Adult Disability Payment which will replace Personal Independence Payment (PIP) this year and the Child Disability Payment, which replaced Disability Living Allowance for Children, will rise by 3.1% – in line with the DWP uprating to prevent a two-tier benefits system in Scotland.

Payment rates for 2022/2023

Best Start Grant

• Best Start Grant Pregnancy and Baby Payment (1st Child Payment) – £642.35 (from £606)
• Best Start Grant Pregnancy and Baby Payment (Subsequent Child Payment and Extra Payment for Twins/Triplets) – £321.20 (from ££303.00)
• Best Start Grant Early Learning Payment – £267.65 (from £252.50)
• Best Start Grant School Age Payment – £267.65 (from £252.50)

Child Winter Heating Assistance (annually) – £214.10 (from £202)

Funeral Support Payment

• Standard rate for other expenses element – £1,070.60 (from ££1,010)
• Other expenses element where there is a funeral plan – £130.65 (from £123.25)
• Removal of implanted medical devices – £21.55 (from £20.55)

Job Start Payment

• Job Start Payment (one-off) standard rate – £267.65 (from ££251.25)
• Higher rate – £428.25 (from ££404)Young Carer Grant

Young Carer Grant (annually) – £326.65 (from £308.15)

Carer’s Allowance Supplement – £9.45 (from £8.90)

Adult Disability Payment – same as PIP uprating of 3.1%

Daily living

• Standard rate – £61.85 (from £60)
• Enhanced rate – £92.40 (from £89.60

Mobility

• Standard rate – £24.45 (from £23.70)
• Enhanced rate – £64.50 (from £62.55)

Child Disability Payment – same as DLA for Children uprating of 3.1%

Care Component

• Highest Rate – £92.40 (from ££89.60)
• Middle Rate – £61.85 (from £60)
• Lowest Rate – £24.45 (from £23.70)

Mobility Component

• Higher Rate – £64.50 (from £62.55)
• Lower Rate – £24.45 (from £23.70)

You can view the full document on the Social Security Scotland website here.

DWP benefits going up by 3.1%

From April 11, benefits delivered by the DWP will increase by 3.1%

New DWP payment rates from 2022 to 2023

Weekly rates are shown, unless otherwise stated.

Attendance Allowance

• Higher rate: £92.40 (from £89.60)
• Lower rate: £61.85 (from £60.00)

Carer’s Allowance

• April 2022 rate: £69.70 (from £67.60)

Disability Living Allowance

Care Component

• Highest: £92.40 (from £89.60)
• Middle: £61.85 (from £60.00)
• Lowest: £24.45 (from £23.70)

Mobility component

• Higher: £64.50 (from £62.55)
• Lower: £24.45 (from £23.70)

Employment and Support Allowance (ESA)

• Under 25: £61.05 (from £59.20)
• 25 or over: £77.00 (from £74.70)

Housing Benefit

• Under 25: £61.05 (from £59.20)
• 25 or over: £77.00 (from £74.70)
• Entitled to main phase ESA: £77.00 (from £74.70)

Incapacity Benefit (long-term)

• April 2022 rate: £118.25 (from £114.70)

Income Support

• Under 25: £61.05 (from £59.20)
• 25 or over: £77.00 from (£74.70)

Jobseeker’s Allowance (contributions based)

• Under 25: £61.05 (from £59.20)
• 25 or over: £77.00 (from £74.70)

Jobseeker’s Allowance (income-based)

• Under 25: £61.05 (from £59.20)
• 25 or over: £77.00 (from £74.70)

Maternity/Paternity/Shared Parental Allowance

• Standard rate: £156.66 (from £151.97)

Pension Credit

• Single: £182.60 (from £177.10)
• Couple: £278.70 (from £270.30)

Personal Independence Payment (PIP)

Daily Living Component

• Enhanced: £92.40 (from £89.60)
• Standard: £61.85 (from £60.00)

Mobility Component

• Enhanced: £64.50 (from £62.55)
• Standard: £24.45 (from £23.70)

State Pension

• Full New State Pension: £185.15 (from £179.60)
• Basic Old State Pension (Category A or B): £141.85 (from £137.60)

Widow’s Pension

• Standard rate: £126.35 (from £122.55)

Statutory Parental Bereavement Pay

• Standard rate: £156.66 (from £151.97)

Statutory Sick Pay

• Standard rate: £99.35 (from £96.35)

Universal Credit (Monthly rates shown)

Standard allowance

Single

• Single under 25: £265.31 (from £257.33)
• Single 25 or over: £334.91 (from £324.84)

Couple

• Joint claimants both under 25: £416.45 (from £403.93)
• Joint claimants, one or both 25 or over: £525.72 (from £509.91)

Child Elements

• First child (born prior to 6 April 2017): £290.00 (from £282.60)
• First child (born on or after 6 April 2017) or second child and subsequent child (where an exception or transitional provision applies): £244.58 (from £237.08)

For the full list of proposed DWP increases to benefits and State Pension, visit the GOV.UK website here.

Child Benefit and Guardian’s Allowance payments are rising

These benefits are delivered by HMRC.

Child Benefit payment rates for 2022/23

There are two Child Benefit rates in place.

Current rates per week

• Eldest or only child – £21.15
• Additional children – £14.00

New rates per week – from April 2022

• Eldest or only child – £21.80
• Additional children – £14.45

How much is the increase?

This is an increase of 65p and 45p respectively per week and means the new, regular four-weekly payments will be £87.20 for an eldest or only child and £56.00 for any additional children.

Over the next financial year, this means parents will receive an additional £33.80 and £23.40 respectively.

Guardian’s Allowance rates from April

The new weekly rate for Guardian’s Allowance will be £18.55 – an increase of 55p on the current 2021/22 rate of £18.00.

Tax Credits

HMRC confirmed that Tax Credits payments will be changing in April for all benefits claimants.

People receiving Working Tax Credits and Child Tax Credits payments will see the maximum annual rates increase for the 2022/23 financial year which starts on April 6.

Depending on your household circumstances, you may be eligible for one or both payments, or you may also qualify for one of two types of disability element add-ons. However, it’s worth noting these are for existing claimants already receiving the legacy benefit and any new claims should be made through the DWP for Universal Credit.

Working Tax Credit rates for 2022/23 (yearly amount shown)

These changes will come into effect on April 6.

Working Tax Credit income threshold

• 2022/23 rate: £6,770
• 2021/22 rate: £6,565

Basic element

• 2022/23rate: £2,070
• 2021/22 rate: £2,005

Couples and lone parent element

• 2022/23 rate: £2,125
• 2021/22 rate: £2,060

30-hour element

• 2022/23 rate: £860
• 2021/22 rate: £830

Disabled worker element

• 2022/23 rate: £3,345
• 2021/22 rate: £3,240

Severe disability element

• 2022/23 rate: £1,445
• 2021/22 rate: £1,400

Child Tax Credit rates for 2022/23 (yearly amount shown)

Child Tax Credit income threshold

• 2022/23 rate: £17,005
• 2021/22 rate: £16,480

Family element

• 2022/23 rate: £545 (no change)
• 2021/22 rate: £545

Child and qualifying young person element

• 2022/23 rate: £2,935
• 2021/22 rate: £2,845

Child disability element

• 2022/23 rate: £3,545
• 2021/22 rate: £3,435

Severely disabled rate of the child disability element

• 2022/23 rate: £1,430
• 2021/22 rate: £1,390

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