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A glimpse of optimism: your January–April 2024 personal finance journal
The cost of living dilemma persists as we start a new year. The base rate set by the Bank of England has increased by 1.75 percentage points in the past year, and average energy costs are at around £2,000. Nonetheless, there are some signs of hope: mortgage rates have begun to decline, and employees will start receiving somewhat larger paychecks this week. The following dates in the first half of 2024 may have an impact on your personal finances:
January first In Great Britain, the new gas and electricity price cap goes into effect. The energy cost cap set by Ofgem is now changed every three months and increased by 5% in the most recent quarter. The annual energy cost maximum for a typical home is now £1,928 for direct debit customers, £1,960 for prepayment families, and £2,058 for those who pay when they get their bill. A typical home uses 11,500 kWh of gas and 2,700 kWh of electricity annually. Although that is less than it was at this time last year, most homes will not receive government assistance this winter.
As part of international regulations to prevent tax evasion, digital companies such as Airbnb and eBay are beginning to gather information about sellers to provide to HMRC. In January 2025, the information regarding sellers' profits will be transferred. Future big tax bills may await traders who have been utilizing the platforms for business purposes without disclosing their profits.
In order to put period trousers on par with tampons and sanitary towels, the VAT has been abolished. Since there is a 20% tax, consumers should anticipate a 17% decrease in price. Three pairs in a Marks & Spencer bundle, which typically retails for £20, ought to cost roughly £3.30 less.
Second round of applications is now available for England's new free childcare program. Extending the present offer for three- and four-year-olds, working parents of two-year-olds should be eligible for 15 hours of free daycare per week starting in April. Parents who make more than £8,670 but less than £100,000 annually individually are eligible. The administration has announced that the 15 hours will be reduced to nine months of age starting in September.
Sixth, employees' national insurance contributions are reduced. The autumn statement from November promised a reduction in the primary rate of NICs paid by workers from 12% to 10%. Any individual who receives earnings between the ages of 16 and state pension age is subject to class 1 contributions. According to the Treasury, in the 2024–25 tax year, an ordinary worker earning £35,400 will receive approximately £450 more in take-home pay. Following the adjustment, an employee making £50,000 annually will pay £3,743.00 in national insurance, saving them £748.60.
December's inflation numbers are released on the 17th. Retailers slashing prices in advance of Christmas may cause the headline rate to drop from 3.9% in November once more.
31st The online self-assessment form deadline for 2022–2023 is approaching. HMRC's self-assessment helplines were closed during the summer, but they are now reopening. Nevertheless, they advise customers to seek out advice online if they can. You would be wise to start early in case you need to phone if you believe your return may be complicated.
Mortgage borrowers who opted to switch to interest-only repayment terms in order to reduce the monthly payment amount will begin to approach the end of the initial six-month period that lenders were instructed to provide on a variety of dates beginning this month. Lenders will certainly get in touch with them to go over their alternatives, but exactly what occurs next will probably depend on each situation.
The Bank of England makes its first interest rate decision of the year on February 1. The money markets anticipate any change in rates will be downward after the last three meetings where rates were held. The Bank might hold off this time as the next round of GDP data isn't expected until the middle of the month.
The GDP data for October through December 15th are released. Another set of negative figures would indicate that the UK is in a recession, as the last set indicated that the economy had shrunk. This could lead the Bank to think about lowering interest rates in an effort to promote growth.
16–23 The last installment for the cost of living is made. Low-income households in England, Scotland, and Wales have received grants from the government to help offset rising costs. Those who received qualifying benefits between November 13, 2023, and December 12, 2023, will automatically get their final payment of £299.
Day of the Budget, March 6. Given the uncertainty surrounding a spring election, the budget presents the Conservatives with a critical chance to outline their expansive platform in an attempt to win over voters. According to reports, this would involve adjustments to inheritance tax and a program to assist first-time homebuyers.
23rd The Bank of England makes its upcoming interest rate announcement public. There will be a cut, as some economists have already forecast, and more will come after. Although it appears doubtful that rates will return to basement levels, borrowers will be hoping they are correct.
The finalized and announced council tax bills for 2024–2025 should be made sometime this month.
First of April The energy price cap is about to undergo its next modification. Cornish Insight experts predict that at this point, Ofgem's price cap will drop by 14%, bringing the average direct debit price down to £1,660 annually. Simultaneously, prepayment clients' charge is scheduled to be eliminated. Even after their bill arrives, those who pay will still be charged extra.
A TV licence will now cost £169.50 per year, an increase of £10.50. Water bill increases are possible as well; specifics are typically disclosed in February. Because of "too slow" progress in addressing leaks and sewage spills, many water firms have been ordered to reimburse customers for £114 million. This will partially offset the
Sixth, the new fiscal year begins. Personal allowances have been fixed once more, meaning that as salary increases take effect, more taxpayers will either be forced into the tax system or pay a larger percentage of tax at the higher rate.
The hourly "national living wage" will increase to £11.44, while the age at which a person is eligible to receive the whole amount will drop from 23 to 21. Hourly pay for younger workers will be £8.60.
On the same day, the self-employed's new NICs are implemented. Class 2 contributions will no longer be due from these workers, while class 4 contributions will have their main rate lowered to 8%. When announcing the reforms in the fall statement, the chancellor said that they would save £350 in 2024–25 for a self-employed individual with profits of £28,200.
The state pension will increase by 8.5% in accordance with average wages, as guaranteed by the triple lock, while the majority of inflation-linked state benefits would grow by 6.7%. The weekly value of the new state pension will be £221.20.
The cost of living dilemma persists as we start a new year. The base rate set by the Bank of England has increased by 1.75 percentage points in the past year, and average energy costs are at around £2,000. Nonetheless, there are some signs of hope: mortgage rates have begun to decline, and employees will start receiving somewhat larger paychecks this week. The following dates in the first half of 2024 may have an impact on your personal finances:
January first In Great Britain, the new gas and electricity price cap goes into effect. The energy cost cap set by Ofgem is now changed every three months and increased by 5% in the most recent quarter. The annual energy cost maximum for a typical home is now £1,928 for direct debit customers, £1,960 for prepayment families, and £2,058 for those who pay when they get their bill. A typical home uses 11,500 kWh of gas and 2,700 kWh of electricity annually. Although that is less than it was at this time last year, most homes will not receive government assistance this winter.
As part of international regulations to prevent tax evasion, digital companies such as Airbnb and eBay are beginning to gather information about sellers to provide to HMRC. In January 2025, the information regarding sellers' profits will be transferred. Future big tax bills may await traders who have been utilizing the platforms for business purposes without disclosing their profits.
In order to put period trousers on par with tampons and sanitary towels, the VAT has been abolished. Since there is a 20% tax, consumers should anticipate a 17% decrease in price. Three pairs in a Marks & Spencer bundle, which typically retails for £20, ought to cost roughly £3.30 less.
Second round of applications is now available for England's new free childcare program. Extending the present offer for three- and four-year-olds, working parents of two-year-olds should be eligible for 15 hours of free daycare per week starting in April. Parents who make more than £8,670 but less than £100,000 annually individually are eligible. The administration has announced that the 15 hours will be reduced to nine months of age starting in September.
Sixth, employees' national insurance contributions are reduced. The autumn statement from November promised a reduction in the primary rate of NICs paid by workers from 12% to 10%. Any individual who receives earnings between the ages of 16 and state pension age is subject to class 1 contributions. According to the Treasury, in the 2024–25 tax year, an ordinary worker earning £35,400 will receive approximately £450 more in take-home pay. Following the adjustment, an employee making £50,000 annually will pay £3,743.00 in national insurance, saving them £748.60.
December's inflation numbers are released on the 17th. Retailers slashing prices in advance of Christmas may cause the headline rate to drop from 3.9% in November once more.
31st The online self-assessment form deadline for 2022–2023 is approaching. HMRC's self-assessment helplines were closed during the summer, but they are now reopening. Nevertheless, they advise customers to seek out advice online if they can. You would be wise to start early in case you need to phone if you believe your return may be complicated.
Mortgage borrowers who opted to switch to interest-only repayment terms in order to reduce the monthly payment amount will begin to approach the end of the initial six-month period that lenders were instructed to provide on a variety of dates beginning this month. Lenders will certainly get in touch with them to go over their alternatives, but exactly what occurs next will probably depend on each situation.
The Bank of England makes its first interest rate decision of the year on February 1. The money markets anticipate any change in rates will be downward after the last three meetings where rates were held. The Bank might hold off this time as the next round of GDP data isn't expected until the middle of the month.
The GDP data for October through December 15th are released. Another set of negative figures would indicate that the UK is in a recession, as the last set indicated that the economy had shrunk. This could lead the Bank to think about lowering interest rates in an effort to promote growth.
16–23 The last installment for the cost of living is made. Low-income households in England, Scotland, and Wales have received grants from the government to help offset rising costs. Those who received qualifying benefits between November 13, 2023, and December 12, 2023, will automatically get their final payment of £299.
Day of the Budget, March 6. Given the uncertainty surrounding a spring election, the budget presents the Conservatives with a critical chance to outline their expansive platform in an attempt to win over voters. According to reports, this would involve adjustments to inheritance tax and a program to assist first-time homebuyers.
23rd The Bank of England makes its upcoming interest rate announcement public. There will be a cut, as some economists have already forecast, and more will come after. Although it appears doubtful that rates will return to basement levels, borrowers will be hoping they are correct.
The finalized and announced council tax bills for 2024–2025 should be made sometime this month.
First of April The energy price cap is about to undergo its next modification. Cornish Insight experts predict that at this point, Ofgem's price cap will drop by 14%, bringing the average direct debit price down to £1,660 annually. Simultaneously, prepayment clients' charge is scheduled to be eliminated. Even after their bill arrives, those who pay will still be charged extra.
A TV licence will now cost £169.50 per year, an increase of £10.50. Water bill increases are possible as well; specifics are typically disclosed in February. Because of "too slow" progress in addressing leaks and sewage spills, many water firms have been ordered to reimburse customers for £114 million. This will partially offset the
Sixth, the new fiscal year begins. Personal allowances have been fixed once more, meaning that as salary increases take effect, more taxpayers will either be forced into the tax system or pay a larger percentage of tax at the higher rate.
The hourly "national living wage" will increase to £11.44, while the age at which a person is eligible to receive the whole amount will drop from 23 to 21. Hourly pay for younger workers will be £8.60.
On the same day, the self-employed's new NICs are implemented. Class 2 contributions will no longer be due from these workers, while class 4 contributions will have their main rate lowered to 8%. When announcing the reforms in the fall statement, the chancellor said that they would save £350 in 2024–25 for a self-employed individual with profits of £28,200.
The state pension will increase by 8.5% in accordance with average wages, as guaranteed by the triple lock, while the majority of inflation-linked state benefits would grow by 6.7%. The weekly value of the new state pension will be £221.20.