April is a big month for your finances
A host of changes that affect your finances have come in to effect this month, which mean that some planning may be needed especially when finances are stretched by the Covid crisis.
We are now in to a new tax year which means various thresholds have changed, affecting your take-home pay. But this also means an increase - albeit small - in benefits to reflect the rising cost of living.
Income tax thresholds have a final rise before being frozen. The amount earned each year before paying tax - known as the personal allowance - will rise from £12,500 to £12,570 and the higher rate threshold from £50,000 to £50,270.
The rise in the personal allowance means marriage allowance will rise very slightly from £1,250 to £1,260. The full flat-rate state pension will rise 2.5% or £4.40 a week to £179.60 per week. Pension Credit is also increasing.
Benefits are rising by 0.5%. So child benefit is rising to £21.15 for the first child and £14 per week for subsequent children, an increase of 10p and 5p respectively.
The National Living Wage will rise 2.2% to £8.91 an hour and will be expanded to start at the age of 23 instead of 25. The National Minimum Wage, for younger workers, will also rise, with the increase depending on their age band.
The Lifetime Isa (individual savings account) charge for accessing money before the age of 60 - for any reason other than to buy your first home - reverts to 25%. It was cut to 20% early in the pandemic. From 6 April, if anyone accesses the money early, the penalty will include some of their own savings too.
For help and advice with ISAs, investments, wealth management and tax efficiency planning please get in touch.