All the changes to minimum wage, income tax, universal credit, cost of living support and more coming in April

It seems like everything is going up at the moment, from the cost of the supermarket shop, rent and mortgage payments, to energy bills and income tax. And this April will see a shed-load of rising costs all at once. 

It’s not all bad news, however, with rises to the minimum wage, statutory sick pay and parental leave set to boost bank balances. But campaigners have highlighted that these increases are not nearly enough given the rates have failed to keep up with inflation for years. 

Benefits are also going up, but charities warn it might not be enough to help vulnerable families through the cost of living crisis. 

No, this isn’t an April fools joke. Here’s how your bank balance will be impacted by the changes to tax, benefits, bills, pay, support for low income households, and rent this April.  

Tax and bills

How much is council tax going up by?

Councils in England have been given the go-ahead to raise council tax by 5 per cent from April 1 and the majority of councils look set to hike taxes by that amount.

That will set the average council tax per dwelling at £1,578 per year in 2023-24 with the average Band D council tax set by local authorities increasing by £99 from £1,966 to £2,065 per year.

There are exceptions: councils in Croydon, Slough and Thurrock will be able to raise taxes higher due to financial difficulties. That means people living in Slough and Thurrock will see council tax increase by 10 per cent while in Croydon rates will rise by 15 per cent.

The majority of councils in Scotland have also raised council tax by 5 per cent. Some councils have opted for higher charges: Falkirk, Stirling and East Lothian councils have hiked rates by 7 per cent while people living in Orkney will see a 10 per cent rise.

Meanwhile, people living in Wales will see council tax rates rise by 5.5 per cent on average. The highest hikes will be found in Conwy where people will be paying 10 per cent more council tax this year compared to 2022/23.

Will your energy bills go up in April?

Chancellor Jeremy Hunt has frozen the energy price guarantee for the next three months – so average household bills will stay at around £2,500 a year. Energy bills are not going up exactly, but some support won’t continue into the summer and they are still more than double what they were at the start of last year.

The energy rebate will not continue in April for the majority of households. This was a £400 discount on energy bills spread over the winter months and the end to that will come as a jolt to many families. 

Adam Scorer, the chief executive of National Energy Action, says this will mean households will be £67 worse off each month and energy bills will be “higher than they’ve ever been during the crisis”. This will push a further 800,000 households into fuel poverty. 

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How much are water bills going up?

Water bills in England and Wales will increase by more than they have in almost 20 years from April. The average household bill will be £448 for the year, according to Water UK. It is a 7.5 per cent increase. You can find out about where to get help to pay your water bills – and all the cost of living help for households – here. 

How much are broadband and mobile bills going up?

Millions of people will see their broadband and mobile bills go up from April, by up to 17.3 per cent. Providers are allowed to increase bills by the rate of inflation, plus a little extra on top (usually around 4 per cent) as is set out by their terms and conditions. You can find out how much your bill is going up on Money Saving Expert’s website. 

What is going on with income tax?

On April 6, the threshold when the highest earners start paying the top rate of tax will fall from £150,000 to £125,140. 

Hunt also froze the threshold at which people start paying higher tax rates. It means through a mechanism called fiscal drag, people could end up paying a bit more when they get pay rises and have a smaller share of income that is tax-free.

Benefits and cost of living payments for low-income households

How much will benefits including universal credit go up by?

Benefits are next set to increase in April this year, by 10.1 per cent. This is based on the inflation rate for September 2022. The exact date you will receive this increase depends on when your benefit is paid. 

A single person aged 25 or over will see their universal credit go up from £334.91 to £368.74 in April. A couple making a joint claim, where one person is aged 25 or over, will have their payments increase from £525.72 to £578.82.

But campaigners warn it is “too little, too late” to help low-income families who cannot afford the basics needed to live.

Universal credit claimants will be £140 short of the money needed to afford the essentials each month even after benefits increase, according to analysis from the Trussell Trust and Joseph Rowntree Foundation (JRF).

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When will cost of living payments be paid?

The DWP has confirmed that the next cost of living payments for most people on eligible benefits will hit bank accounts between April 25 and May 17.

A second cost of living payment of £300 will be made in autumn, and a third of £299 will be paid in spring 2024. 

If you get tax credits, and no other low-income benefits, you’ll get your cost of living payment from HMRC shortly after the DWP payments are made.

How much will social housing rent increase by?

Tenants living in social housing will see rents rise by 7 per cent in April.

Unlike private rents, rents for social housing are centrally regulated with the government setting the maximum housing associations and local authorities can hike rents every year.

Usually that level is calculated at 1 per cent higher than inflation but this year that would have meant tenants faced an 11.1 per cent rise due to soaring inflation last autumn.

The government stepped in to limit rent rises to 7 per cent following a consultation that also explored the possibility of lower caps at 3 and 5 per cent.

With many social housing residents on low incomes and the wider impact of the cost of living crisis, campaigners called for rents to be frozen but this was rejected by the government.

While rents are regulated, service charges which many social housing tenants pay to cover communal utilities and services are not capped and are likely to rise in April too.

Pay

How much will the minimum wage increase on April 1?

All workers, including casual workers, people on zero hours contracts and agency workers, have the right to be paid at least the minimum wage, which is going up on April 1. 

The government set national minimum wage is broken down for different age categories. The rate for the highest – 23 and over – was rebranded as the national living wage, not to be confused with the independently set Real Living Wage.  

Here’s how much your pay will go up depending on your age and type of employment:

National living wage increase to £10.42 an hour (9.7 per cent increase)

21-22-year-olds will be entitled to £10.18 (10.9 per cent increase)

18-20-year-olds will be entitled to £7.49 (9.7 per cent increase)

16-17-year-olds will be entitled to £5.28 (9.7 per cent increase)

Apprentices will be entitled to £5.28 (9.7 per cent increase)

While this is the highest ever hike to the rate, it is still below inflation, which hit 11.1 per cent in October last year and has remained stubbornly high.

If your employer does not increase your pay according to the legal minimum, you should contact the Acas helpline which can help you complain to HM Revenue and Customs (HMRC) or make a claim to an employment tribunal.

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Will sick pay increase in April 2023?

Statutory sick pay will increase from £99.35 per week to £109.40 per week, effective from April 6. The statutory amount is the minimum amount that employers must pay employees off sick for up to 28 weeks, but they may choose to pay their staff more and for longer. 

How much will maternity and paternity pay, adoption, shared parental, and parental bereavement pay go up by?

Statutory maternity and paternity pay, as well as adoption, shared parental, and parental bereavement pay will increase from £156.66 per week to £172.48 per week in April.

The government has a calculator to find out what you’re entitled to if you’re having a new baby.

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