The New Year is just around the corner and with that in mind, people have been urged to keep in mind some significant changes that are due to happen in terms of money.
2024 will see an array of events, law changes and new rules coming into force that affect the way we earn and spend money.
One of these which will hit on the very first day of the year is the Ofgem energy price cap rise, which means the unit price for gas and electricity will increase, with households paying more on their bills annually.
Some other changes include wage rises, National Insurance cuts, and possible changes to the rate of inflation.
Here’s a roundup of all the money changes we can expect to see in 2024, as reported by the Mirror.
Ofgem price cap rise – January 1
Kicking off with the energy price cap rise, which comes into effect on January 1 2024.
Typical households who pay for their bills via Direct Debit will see their price cap rise from £1,834 a year to £1,928, and these rates will be in place until March 31.
The price cap is updated every three months, meaning it will change again on April 1, July 1 and October 1. It’s important to remember that it’s not a total limit on how much you can pay for energy – instead, it sets the unit rates for gas and electricity, as well as the standing charges.
New tax rules – January 1
Also coming into effect at the very beginning of the year is some new tax rules for people who earn money on the side of their regular jobs.
Online platforms such as eBay, Vinted, Etsy, Uber, Deliveroo, Fiverr, AirBnb and TaskRabbit will be instructed to take note of how much money people earn and report back to HMRC.
You can earn £1,000 in additional income each tax year alongside your regular job – this is known as your Trading Allowance.
Those who make any more than this will need to let HMRC know through self-assessment and pay tax on it.
National Insurance cut – January 6
The rate of National Insurance will fall from 12% to 10% from January 6. However, the threshold for when you start paying National Insurance will remain the same until April 2028.
Employees currently pay 12% of their income in Class 1 National Insurance contributions if they earn more than £12,570. For people who earn over £50,270, you pay 2%.
Inflation – January 17
The latest inflation data from the Office for National Statistics will be released on January 17.
The Consumer Prices Index (CPI) measure of inflation is currently at 3.9%. At its highest point, inflation reached 11.1% in the 12 months to October 2022, and the Bank of England has a target of 2% inflation.
The Bank of England says it expects inflation “to continue to slow” and “be back to normal levels” by the end of 2025.
Self-assessment deadline – January 31
Anyone who needs to file a self-assessment tax return have until the end of next month to do so. If you don’t file, you face a fine of £100 – even if you don’t have any tax to pay.
Further penalties of £10 a day are then applied after three months, up to a maximum of £900. After six months, you’ll get a further penalty of 5% of the tax owed or £300 – whichever is greater – which is repeated at 12 months.
You also need to pay the tax you owe by January 31. There is a penalty of 5% of tax unpaid after 30 days, another 5% of tax unpaid after six months, then another 5% of tax unpaid after 12 months.
Interest rates – February 1
The Bank of England base rate is currently at 5.25%. It has been held at this level at the last three Bank of England Monetary Policy Committee meetings.
The next meeting will be held on February 1.
The Bank of England governor Andrew Bailey has highlighted that it is “far too early” to discuss cutting interest rates. The latest Monetary Policy report says rates are expected to remain around 5.25% until the final quarter of 2024.
Cost of living payment – February 6
Those who are eligible to receive the cost of living payments will receive their next one between February 6 and 22 next year.
You need to have been entitled to a payment for a qualifying benefit between November 13 and December 12 to get the cost of living cash.
The full list of benefits that qualify for the third cost of living payment are:
- Universal Credit
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Income Support
- Working Tax Credit
- Child Tax Credit
- Pension Credit
Bereavement support deadline – February 9
The Department for Work and Pensions (DWP) has changed the rules surrounding bereavement benefits.
Bereavement Support Payments and Widowed Parent’s Allowance were previously only available to married couples and those in civil partnerships.
But now, couples who were cohabiting and have dependent children are also eligible. You only have until February 8, 2024 to apply – after this date, you may not get the full amount of payments owed.
Pension Credit deadline – March 5
Households are advised to check their eligibility for Pension Credit by March 5 in order to get the cost of living payment. This can be backdated by up to three months.
The benefit is available to people of state pension age on a low income. It tops up your income to £201.05 per week for single people and to £306.85 for couples. You’ll also receive additional benefits such as free TV licences for over 75s and a discount on council tax.
Spring Budget – March 5
Chancellor Jeremy Hunt will unveil the Spring Budget on March 5 next year, giving the government one last chance to make any financial changes before the general election.
Reports suggest there could be further tax cuts as well as new help for first-time buyers to stimulate the property market.
Minimum wage rises – April 1
Millions of workers on minimum wage will be given a pay rise from April 1, as new pay rates come into force.
If you are aged 23 and over, the national living wage will increase from £10.42 to £11.44 an hour. Workers age 21 to 22 will see their pay rise from £10.18 to £11.44 an hour. Under-18s will see their pay increase from £5.28 to £6.40 an hour.
TV licence increase – April 1
From this date, the annual price of a TV licence will rise to £169.50. The last price hike was in April 2021, when it rose to £159.
If you watch or record live TV programmes on any channel, then you’ll need to pay for a TV licence. If you’re caught doing so without one, you risk facing a fine of £1,000.
End of tax year – April 5
The end of the current tax year always falls on April 5. This is the last day before all your tax allowances reset, so make sure you make the most of these before this day before the new tax year starts on April 6.
Tax cuts for self employed – April 6
The start of the new tax year will also change how self-employed people pay tax. Normally you pay Class 2 or Class 4 contributions but Class 2 will be scrapped from next April.
They are set at a fixed weekly rate of £3.45 and are paid if your profits are more than £12,570 a year. Class 4 contributions are currently charged at 9% on profits between £12,570 and £50,270 – but this will be reduced to 8% from April 2024. You pay 2% on profits over £50,270.
State pension and benefit rise – April 8
Millions of people who claim benefits such as Universal Credit and Personal Independence Payment will see their payments rise by 6.7% from April 8.
This won’t come into effect until the following benefit payment date.
Housing Benefit and Council Tax Support will come into effect slightly earlier, on April 1, while Tax Credit increases will come into force at the start of the new tax year, on April 6.
The state pension will rise by a bigger 8.5% from April 8.
Register for self-assessment – October 5
If you need to register for self-assessment tax for the first time, the deadline is always October 5 every year. If you register late and miss the tax deadlines, you could be fined by HMRC
You can register online through GOV.UK or by calling the self-assessment helpline on 0300 200 3310.
Paper self-assessment tax deadline – October 31
If you plan on filing a paper self-assessment tax return, the deadline is October 31. If you don’t manage to do this in time, you can fill out your tax return online – the deadline for this is January 31 the following year.
Again, you face fines if you miss the deadline.
Warm Home Discount – October
The Warm Home Discount scheme gives eligible households £150 off their energy bill. The scheme reopened in October 2023, so it is likely to become available once again around that time in 2024.
To be eligible for the Warm Home Discount scheme, your energy supplier must first be signed up.
Scots who claim benefits will need to apply for the discount through your supplier under the ‘broader group’ criteria.
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