New tax year: Bills and benefits rise, but tax rise risk looms
The new tax year has started with warnings for people to be cautious with their finances due to tax, pension, and benefit rules.
Income tax thresholds are frozen until 2028, meaning pay rises could push people into a higher tax bracket.
The Office for Budget Responsibility predicts that 3.2 million new taxpayers will be created, with 2.6 million people paying higher rate tax.
State pension and a range of benefits will increase by 10.1% on Monday.
For the state pension, paid to those aged 66 and above, the changes mean the amount received from Monday will be:
- £203.85 a week (up from £185.15) for the full, new flat-rate state pension (for those who reached state pension age after April 2016)
- £156.20 a week (up from £141.85) for the full, old basic state pension (for those who reached state pension age before April 2016)
Prices are rising, especially the cost of grocery shopping, although the rate of increase is expected to slow later in the year.
The new tax year personal finance considerations can easily be overlooked, so people need to be diligent with their finances.