Price hikes: Britons urged to take action as £73 per month rise in bills kicks in | Personal Finance | Finance
Bills for people in a number of areas of life are set to increase this April, while tax hikes will also come into play for millions. With pockets being directly targeted, many are worried about the future of their finances.
Myron Jobson, senior personal finance analyst at interactive investor, said: “April 1 may mark April Fool’s Day, but the rise in the cost of key household bills from the start of the month is no laughing matter for those struggling to stay financially afloat amid the cost of living crisis.
“Withstanding the cost of living squeeze is hard enough for many as is, but the added cost pressures set to come into play in April threatens to obliterate even the most finely tuned budgets.”
The energy price cap hike was highlighted as a major concern, with interactive investor estimating it will increase bills by nearly £58 per month on average.
Other rising bills include council tax, water and sewage bills, mobile phone tariffs, and broadband prices.
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The only reprieve in this sense is that in July the threshold at which people start to pay National Insurance will rise to £12,570 – preventing some of the lowest earners paying the tax.
Other forms of support, however, have been made available.
Mr Jobson explained: “The £150 council tax rebate, as part of the Government’s initiative to help households with rising energy costs, offers some reprieve for consumers. In October, households will also get £200 discount on energy bills which has to be repaid over five years.
“Lower earners will see a boost in their wages when the National Living Wage increases by 6.6 percent to £9.50 an hour at the start of April for workers aged 23 and over. The Government is also introducing increases between 4.1 percent and 11.9 percent to each of the National Minimum Wage rates for younger workers and apprentices.
“Those on state benefits like Universal Credit will see their payments rise by 3.1 percent in line with the Consumer Price Index (CPI) for the year to September 2021. The way in which we increase benefits is not befitting of the cost of living crisis we now face, and the current course of direction worsens the squeeze on Britain’s lowest income families.”
“For example, if you’ve been with a broadband provider for a while, it is likely that any introductory offers will have expired, and you might be paying more than you need to. The same goes for mobile phone contracts. Shop around to see if you can get a better deal.”
Reviewing subscriptions can also help Britons to save money as they slash spending on non-essentials, particularly subscriptions they no longer use.
Whether this be for TV, magazines or newspapers, keeping tabs on spending in this realm is important, and sharing subscriptions in one’s household could also be a potential solution.
Finally, Mr Jobson highlighted the idea of salary sacrifice, and added: “This arrangement allows employers to reduce employees’ salary and pay the equivalent amount into a non-cash benefit such as pension contributions and a cycle to work scheme.
“Think of a pension as deferred income and this seems like a good way to reduce your overall NI bill without reducing your income, if you are happy to take it after age 55 instead.
“These benefits reduce the NI payable by the employee as well as the employer. However, a lower salary can affect entitlements such as maternity/paternity pay mortgage applications based on one’s income and some state allowances.
“As such, people should always consider how such benefits could impact their finances more broadly.”
