Council tax, energy tariffs and the TV licence fee are just some of the living costs set to increase in ‘Awful April’
Millions of households are set to be hit by a storm of increasing bills this week.
Council tax, energy, water, broadband, TV licences and car tax are just some of the costs that are set to rise from April.
It is piling fresh pressure on Sir Keir Starmer and Rachel Reeves to do more to tackle the high cost of living, even though inflation is only sitting at 2.8 per cent.
Higher bills are compounded by the fact that tax thresholds have been frozen since 2022 – meaning people start paying tax once they earn above £12,570.
Before that date, they rose each April in line with inflation – but this is not forecast to happen again until 2028.
“Outgoings have increased significantly over the last 12 months, and many households are already struggling to keep up,” explained Matthew Sheeran, budgeting expert at Money Wellness.
Below, The i Paper runs through the bill rises that are coming in this week, and how much they will cost you.
1. Council tax – up £109 a year
Council tax is a compulsory charge on properties in Britain, with most people over 18 who rent or own a home having to pay it. Northern Ireland uses a different domestic rates system.
The exact amount of tax you pay will depend upon your property – with homes placed in bands – but a typical home in England attracting a charge of £2,171 per year. From April, councils will increase the tax by varying amounts.
In England, most local authorities are allowed to increase council tax by 4.99 per cent, which for a typical band D property means an increase of £109 per year. Some councils are raising rates by more than this though, and some by less.
For the upcoming year, the Government is letting six areas introduce bigger rises. For example, Bradford Council will increase bills by 10 per cent and they will rise by 9 per cent in Newham, and Windsor and Maidenhead.
How can I cut my council tax bills?
There are various methods. You can get a 25 per cent discount on your councuil tax bill if you are the only adult in your property eligible to pay. Certain people on low incomes, and those claiming benefits including universal credit or pension credit, can also get reductions.
2. Energy bills – up £111 a year
Most households in England, Wales and Scotland will see an energy bill rise from 1 April, as the energy price cap will rise by 6.4 per cent. The cap does not affect Northern Ireland, which has a separate system.
Under the price cap, you are charged depending on how much energy you use, but for a typical household, the rise in the cap equates to an increase from £1,738 to £1,849.
How can I cut my energy bills?
Most providers put you on a price cap tariff by default – also known as a standard variable tariffs. However, you can lock in a cheaper deal if you shop around. The most typical way to do this is to get a fixed deal – offering guaranteed energy prices for a set period of time no matter what happens to the price cap.
For example, Outfox the Market’s Fix’d Dual Mar25 v3.0, which has a fixed price for one year, is 14.2 per cent (£262 for a typical household) lower than April’s cap.
However, as the price cap is reviewed every three months, you may end up locked into a fixed deal that is higher than a variable deal should it come down.
3. Water bills – up £123 a year
The average annual water bill for households in England and Wales will increase by £123, or 26 per cent, from 1 April, though in Scotland customers will see a smaller rise, and in Northern Ireland water charges work differently.
There is huge variation in increases depending on where you live. Southern Water customers will see the biggest rise at £224 per year, while Sutton and East Surrey (SES) Water customers will actually see a decrease of £5 a year.
How can I cut my water bill?
Getting a water meter can be an effective method for many. Use this online checker from the Consumer Council for Water to see if you could save.
4. Car tax – up £5 a year
There are multiple changes to road tax (officially known as vehicle excise duty) from April. Generally, car owners will pay £195 per year, an increase of £5 a year.
However, the increases may be more for some people. For example, electrical vehicles (EVs) will also no longer be exempt.
EVs registered between 1 April, 2017 and 31 March, 2025 will have to pay the same standard rate of road tax as all other motorists.
5. TV licence – up £5 a year
The cost of a TV licence is to rise by £5 to £174.50 from April.
How can I save on a TV licence?
Some households do not have to pay for a TV licence, if they do not watch live TV and only watch catch-up, as long as they don’t use BBC iPlayer. You can also get a free licence in certain circumstances – for example if you are over 75 and receiving pension credit, or living with someone who is.
6. Broadband and phone bills – up £52 a year
Many telecoms providers increase their bills in April. These vary massively from provider to provider. For example, EE customers will face a £1.50 per month increase on mobile SIM-only plans, which equate to £18 per year. This comes in from 31 March.
According to USwitch.com, if you are on a fixed-price increase broadband plan, your price will probably go up each year by £3 per month.
The exact timing varies, so not everyone will face an increase in April, though some providers, such as BT, do increase prices at this point.
How can I save on phone and broadband bills?
You generally can’t do much about increases if you are within your contract term. If you are outside of it, you are free to leave for a better deal, or haggle with your existing provider to see if they will cut your bill.
7. ‘Stealth’ taxes
Since 2022, income tax thresholds have been frozen, so as pay has increased and inflation has gone up, more and more of people’s income has gone to tax.
You pay 20 per cent income tax on pay above £12,570; 40 per cent above £50,270; and 45 per cent above £125,140. This is not set to change until at least 2028.
This means that if you are expecting a pay rise, you may be surprised to see how little this translates to your pay cheque.
One group that has been affected by this is pensioners. The state pension increased 10.1 per cent in April 2023, 8.5 per cent in 2024 and is due to rise by 4.1 per cent from April this year.
The full new state pension is just below the £12,570 threshold, so those with additional income – perhaps from private pensions they have amassed – are likely to see some of that income sent to HMRC as tax.
8. Stamp duty
From today, the current stamp duty levels, which have been in place since the mini-Budget in September 2022, will come to an end. It means the threshold for first-time buyers will drop to £300,000, while for everyone else, it will be halved to £125,000.
A typical buyer will face a tax bill of £4,750 instead of £2,250 – in addition to legal and conveyancing costs, mortgage fees and their deposit.
What’s happening to the minimum wage?
The one glimmer of positivity is that many workers will receive a pay rise after statutory minimum wage rates increased on Tuesday.
The Government says that more than three million employees across the country will benefit after the Chancellor announced the increases in her autumn budget last year. Rachel Reeves described it as a “significant step” in the Government reaching their manifesto pledge of a “genuine living wage for working people”.
From Tuesday, the National Living Wage is rising, for every worker aged 21 and over – giving a pay rise of up to £1,400 over the course of a year, based on a 35-hour working week.
The 6.7 per cent increase means the rate rises 77p from £11.44 to £12.21. Full-time staff can expect to make £26 more a week, and £117 more a month, the Government said.
The National Minimum Wage – which covers those aged 21 or under – will go up to £10 an hour for 18 to 20-year-olds – a 16.3 per cent rise – and to £7.55 for 16 and 17-year-olds, an 18 per cent increase.
Other changes
From 6 April, changes to national insurance contributions (NICs) will come into effect. The rate at which employers contribute to NICs will rise from the current 13.8 per cent to 15 per cent.
This means that for every £1 paid in salary above the threshold, employers will now contribute 15p in NICs.
The earnings threshold at which employers start paying NICs will also decreas, from £9,100 to £5,000 per annum.
Meanwhile, non-dom tax status will be scrapped and replaced with a residence-based regime, which will also bring foreign earnings into the UK inheritance tax system.
A “non dom” means a UK resident whose permanent home is outside the country for tax purposes. The Government is following through on a promise to close this loophole.
Many welfare benefits will see an increase. More than 20 million people in the UK receive benefits or pensions from the Government to prop up their income.
These will increase by 1.7 per cent from April and include universal credit, attendance allowance, disability living allowance, pension credit, personal independence payment (PIP), carer’s allowance, tax credits (from HMRC) and child benefit.
