With April just around the corner, Britons are bracing themselves for a raft of financial changes that will affect families right across the country. Starting April 1st, cuts will be made in wages, benefits, and utility bills. These updates are intended to better reflect economic changes and the increased cost of living struggles so many are facing today.
The national minimum wage will rise by 77p to £12.21 an hour. Apprentices and new workers aged under 18 will have a pay rise of £1.15 an hour. With this raise their minimum wage will rise to £7.55. Universal credit and other benefits will be boosted by small amounts. At the same time, state pension payments are expected to increase markedly due to the triple lock policy. In addition to these very important upgrades, utility costs and other household expenses are about to increase, hitting household budgets hard across the country.
Wage and Benefit Increases
That said, a bunch of good things are happening on the 1st of April, most importantly a huge rise in the national minimum wage. For most of these workers, this wonderful news translates into a faceless acronym having set their wages to £12.21 per hour. This modification recognizes the importance of ensuring low-income workers continue to receive targeted assistance as living expenses soar. Going forward, apprentices and workers under 18 will earn at least a £7.55 minimum wage. This increase will provide a long overdue raise to their bottom line.
In parallel with these wage rises, there will be cuts to universal credit and other benefits. If you’re single and 25 or over, the basic universal credit allowance will go up. That will increase from £393.45 to £400.14 a month. Benefits like universal credit and child benefit are set to increase by just 1.7% from April. This increase will bring important relief to families living on razor-thin margins.
The state pension is set to see a big increase. 4000 pensioners to benefit from their pension payments increasing by 4.1%. This increase has been helped by the triple lock policy, which guarantees that pensions grow with the highest of earnings growth. Those who qualify for the full new state pension will get £230.25 a week, up from £221.20. At the same time, recipients of the older (pre-2016) basic state pension will have their weekly payments increase from £169.50 to £176.45.
Rising Costs and Utility Bills
Even with these significant increases in wage and benefits, households will still experience exorbitantly higher utility and cost of living starting next April. And just today, the UK energy regulator Ofgem has called for £111 increase in their energy cap on gas and electricity charges. This change will raise the typical household’s average annual energy bill. In reality, it will increase from £1,690 to £1,849.
Beginning on April 1, water bills in England and Wales will increase. On average, that means you’ll end up paying an additional £10 per month. This increase is an added burden on the financial calculus for families as they try to make ends meet every month.
Council tax is yet another totem of squeezed budgets that residents will face the pain of. The average council tax bill for a typical band D property in England was already on course to rise. So it’ll increase by the maximum rate permitted, which is currently 4.99%. That’s an average of annual hikes of £109, taking the average council tax bill to £2,280.
Postal Service and Additional Costs
Beyond changes that will affect the cost of living at home, we can expect increased costs to the postal service, too. From 7 April, the cost of first- and second-class stamps will increase. The price of a first-class stamp will go up by 5p, or 3%, to £1.70. In the meantime, the cost of second-class stamps will go up by 2p, or 2.4%, to 87p.
For those on the frontlines of caregiving, we see a modest upswing in encouragement. The carer’s allowance will rise to £83.30 per week. This should be true for people who regularly provide unpaid care to another person at least 35 hours a week.
These changes mirror larger economic forces and the difficulty of reconciling the public services’ funding requirements with the financial reality facing people.