Universal Credit, Council Tax, driving lessons: 23 new laws and rule changes coming next month.
*Millions will be affected across the country.
ALL THE CHANGES COMING TO UNIVERSAL CREDIT, PENSION AND OTHER BENEFITS IN APRIL 2021
With the start of the new tax year quickly approaching, the public should brace themselves for a rise in a number of bills and new rules and laws.
This year, a number of new price hikes, extra charges and expensive new rules and laws are being introduced after a rise in inflation.
New rules being brought in include changes around mortgages and driving lessons with car tax and council tax increasing.
Positives that are coming into force include a rise in minimum wage and an advance in Universal Credit payments.
There are 23 changes coming into play next month affecting millions across the country.
Here are the major changes that are set to kick in next month.
1. New 95% mortgages
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One of the biggest and most sought after changes will be the 95% mortgages that was announced earlier this year by Chancellor Rishi Sunak.
Mr Sunak aims to help new home owners by offering more affordable mortgages due to the lower deposit needed.
The government said will also be offering to back buyers and compensate banks or building societies if a person is unable to meet their repayments.
Lloyds, Barclays, Santander and HSBC have already signed up to the initiative ultimately highlighting the number of organisations set to offer the 95% mortgages.
It comes alongside an extended stamp duty holiday which will now run until the end of June.
It’s a massive boost for people looking to buy a home.
2. Council tax
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%.
Universal Credit: Rishi Sunak expected to permanently increase payments for six million people
The Office for Budget Responsibility (OBR) said councils will increase the levy by £1.8billion after the Government gave them the go-ahead to introduce hikes of up to 5%.
It will see increases of between £50 and £100 for band D properties, which paid an average of £568 in 1993 compared to £1,817 this year.
“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.
3. Minimum wage increase Photo courtesy Markus Winkler, Unsplash
One change which will be great news for the majority is the increase in minimum wage on April 1.
Basic rate workers will get a 2.2% increase, Rishi Sunak said, with the National Living Wage rising to £8.91 an hour.
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.
4. Universal Credit
More positive news coming on April 1 is changes to Universal Credit payments.
Payments are rising next month meaning claimants will receive more depending on their circumstance.
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.
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.
There are also changes and extensions to advance payments. Currently these 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% of the standard allowance, but this will reduce to 25%.
The measures will now come into force from April 2021 instead of October 2021.
PIP claimants could be eligible for other benefits including discounts and extra cash
5. Car tax
Changes to car tax and road tax are also coming in which will see some people pay more than they currently do.
Cars that emit between 76g and 150g per kilometre of CO2 will see VED rates rise by £5 this year bringing the toal to £220.
VED, often called road tax, is the tax which is rising but it does depend on your car and how much CO2 it emits.
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.
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.
6. Driving lessons and tests
Driving tests in England have once again been disrupted.
Lessons and tests for those learning to drive will resume next month after being stopped due to the lockdown restrictions.
Lessons, theory tests, motorcycle tests and LGV driving tests will resume on April 12 as part of Step Two in the Government’s Covid Roadmap.
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.
7. 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% 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.
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.
8. ‘Benefit in Kind’ rates
After being scrapped this time last year, Benefit in Kind (BiK) rates are back.
They were binned to encourage electric car usage, specifically through the use of salary sacrifice schemes.
But 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%.
9. State pensions rise
Come next month, state pensions will rise 2.5% increasing the weekly payments to £179.60 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.
“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.”
10. 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.
11. 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, 2021.
12. 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% tax payers) will jump to £50,271.
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 1.3million more people paying income tax and one million more paying the higher rate of tax in the long run.
13. 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.
14. Energy price increase
From next month, millions of households will face an increase in energy prices will is near £100.
The maximum amount energy firms can charge households on standard variable tariffs is going up on April 1 with the cap rising to £96 – taking the average bill to £1,138 a year.
It will rise to £87 a year for those on prepayment meters.
But you may be able to save much more than that by switching to a fixed deal instead.
15. 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.
Instead, they will be given a lump sum upfront.
If you are eligible, you should receive your payment by April 23, 2021.
16. Child benefit rates
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% for every £100 earned over £50,000. If over £60,000 is earned in a year, the whole amount must be repaid.
Universal Credit benefits: Claimants could get 50 per cent discount on bus and train travel.
17. 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).
18. 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.
19. Housing benefit rates
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.
20. Pension Credit
Department of Work and Pension [DWP]
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.
Around one million people are currently missing out on pension credits.
21. Personal Independence Payments
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.
22. 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.
23. 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).
Source BBC.
