2021 is here – and with a new year comes a number of changes that will affect your money.
In the next 12 months, at least 14 things need to be considered – from taxes to benefits to wages.
In many cases, people are given additional support during the coronavirus pandemic, Der Spiegel, that has been deprived of them Reports.
However, not all changes are bad – some benefits increase as additional rules are put in place to help you get better with your money.
It all comes after a year of record peacetime government borrowing.
Sarah Coles, Hargreaves Lansdown Personal Financial Analyst, said: “The government woke up with a hell of a financial hangover this year. Now that the pandemic has spurred spending and credit on a scale we have never seen in peacetime, tough questions are Emerge about how on earth we’re going to pay for everything.
“It is still very early for Rishi Sunak to think about a reclamation. Virus mutations increase the risk of transmission and Brexit leads to further potential complications.
“The council tax will rise in April, however, and there is speculation of further potential pain.”
Here are the main changes that have already been confirmed:
- 1 January 1st – tampon tax scrapped
- 2 February – New “investment paths” for pensions
- 3 March 1 – Rail fares rise
- 4 March 31st – Stamp duty vacation ends
- 5 March 31st – Help with purchasing changes
- 6 March 31 – Changes to the energy price cap
- 7 April – Public sector pay for 1.3 million people is frozen
- 8 The council tax increases by up to £ 212
- 9 Income tax breaks are changing
- 10 April 6 – State pensions rise
- 11 April 1 – Minimum wage increases
- 12 April 1st – vacation ends
- 13 April – Universal Credit Boost ends
- 14 October 1st – Last credit break ends
January 1st – tampon tax scrapped
After a five-year campaign, the controversial “tampon tax” was abolished on January 1st.
Although the immediate change will cut just a few pence in sanitary ware prices, the average woman should save nearly £ 40 over the course of her life.
Chancellor Rishi Sunak said: “Sanitary products are essential, so it is right that we do not collect VAT.”
February – New “investment paths” for pensions
At 55, you can do what you want with all of the money you saved in your retirement – but that money may have to last 50 years.
Starting April, people looking to redeem their funds will be offered four options – examples of what the next five years will look like financially – and four plans that best fit those scenarios.
Instead, you have the option to speak to a professional advisor – although there is usually a cost involved.
Steven Cameron, Aegon’s Pension Director, said: “Beginning in February, clients entering the drawdown without advice will be asked to choose which of the four pension scenarios will best fit and will suit their plans for their pension funds over the next five years then offered the way that looks. ” to best suit these plans.
“This should help individuals avoid particularly ill-advised investment decisions, but it does not replace personalized advice from a professional advisor on where to invest and how much income can be safely used for a lifetime.”
March 1 – Rail fares rise
According to the Ministry of Transport (DfT), ticket prices for trains will rise by an average of 2.6% from March 1st.
The rise in price means some annual passes will go up by more than £ 100.
The price increase only applies to regulated tariffs, which make up around half of the tariffs and include season tickets on most commuter routes.
Unregulated price increases – for example for pre-sale tickets – are expected to be in line with regulated tariffs as the government assumes the financial liabilities of the operators.
March 31st – Stamp duty vacation ends
The Stamp Duty Leave, which gives home buyers up to £ 15,000 off the taxes they pay on completion, ends March 31st.
From today’s perspective, this means that anyone who has not yet completed their home sale by this date is again liable for the full tax burden.
Experts have warned that this sudden end could cause thousands of home sales to collapse in the same day – but so far the Chancellor has resisted pressure to lengthen the window.
March 31st – Help with purchasing changes
The current purchase aid system, which offers extra cash upfront for new home purchases with just 5% down payment, ends on March 31st.
Under the new system, only first-time buyers can participate, while the loan amount is capped at 1.5 times the average first-time home in the area – and not a national limit.
There are also changes to the mortgage rules and how much of a loan you can get.
March 31 – Changes to the energy price cap
The energy price ceiling covers how many people can be charged with standard tariffs – be it with prepayment or standard meters.
The fee is reviewed every 6 months.
As of the last change, bills fell by an average of £ 84, but we don’t yet know if bills will go up or down.
April – Public sector pay for 1.3 million people is frozen
NHS workers will raise their wages – along with people making £ 24,000 or less a year – but there won’t be a wage increase for 1.3 million people this year.
The Chancellor’s spending review stated: “To ensure fairness between the public and private sectors and to protect public sector jobs and investments in services as Covid-19 continues to affect public finances, the government is for some Employees temporarily suspend their main pay. ” . “
The council tax increases by up to £ 212
The council tax is set to rise by an average of £ 106 this year – or £ 212 for the most expensive homes.
Councils were told they could raise prices by up to 5% if they were responsible for social care – plus additional costs for local policing.
Income tax breaks are changing
Income tax thresholds – in other words, how much money you can make before income tax is levied on your money – increases by 0.5%.
This is expected to increase the allowance for property taxpayers to around £ 12,570 and for higher rate taxpayers to £ 50,270.
In England, the thresholds for national insurance should also rise by 0.5%.
April 6 – State pensions rise
While others will see little or no increases in wages and benefits, the state pension will increase by 2.5%.
This gives people with full credit for the new pension £ 179.60 per week.
The increase is the result of rules according to which pensions are guaranteed to increase at least by this – or by inflation or average wages if they show larger increases.
April 1 – Minimum wage increases
Britain’s low-paid get a raise of just 19p an hour this year.
The national living wage will rise to £ 8.91 an hour in April, with this rate being extended to those aged 23 and over.
For apprentices it is £ 4.30 per hour (minimum), £ 4.62 per hour for children under 18, £ 6.56 per hour for children under 20 and £ 8.36 per hour for 21-22 year olds Hour.
April 1st – vacation ends
The Chancellor extended the vacation program until the end of April 2021.
However, he has given himself the chance to expand it.
The Treasury Department said the March 3 budget will outline the next phase of the plan to fight the virus and protect jobs.
April – Universal Credit Boost ends
An additional £ 20 per week was added to Universal Credit during the pandemic.
However, this should end in April.
October 1st – Last credit break ends
At the start of the pandemic, financial regulators put in place a number of new rules to help people struggling with debt.
This included the right to interrupt payments on credit cards, loans, mortgages, and more.
You have until March 31st to apply for an initial or additional payment leave. However, you can only have 6 months in total before switching to other repayment systems instead.
If you are applying for the first time in late March and have the full six months to complete, you can defer payments until October 1.
It is important to note, however, that while on a paying vacation, you will still be charged interest – in order to increase your debt – although that should be the only consequence.