FAMILIES are bracing themselves for a series of price hikes to household expenses next week, with annual rises heralding the start of the new financial year.
Thankfully, in many cases there are ways to beat the rises, and there is some good news in the mix too, on tax and inheritance.
Alex Perrin, of advice site ismybillfair.com, said: “Don’t be a sitting duck on national price hike day, fight back.”
Today Sun Money gives you the tools to do just that…
COUNCIL taxes in England are up by an average 5.5 per cent from £1,258 to £1,327 from Monday, but some areas are paying a lot more, such as Salford, which is going up by 9.3 per cent.
Rises are also expected in Wales and Scotland.
REMEDY: There’s not much you can do, unless you qualify for a council tax reduction – for example, if you live with someone with a “severe mental impairment (SMI)”, on your own, or you’re on a low income. Also, check if your home is in the correct property band.
THESE are up by 2p to £9 in England on Monday. They are free in the rest of the UK. REMEDY: If you need a lot of prescription meds you could get an NHS prescription season ticket, which covers all your prescriptions for a one-off £29.10 for three months, or £104 a year.
THE energy price cap, which sets the rate that most families pay, rises £117 from £1,137 a year to £1,254 a year for someone on typical usage.
Up to 3.6million households with prepayment gas and electricity meters will also see the cap on their energy tariffs increase by an average of £106 per year.
REMEDY: If you’re on a standard tariff, switch to a better deal as soon as possible – the cheapest tariffs on the market cost around £300 a year less.
WATER and sewerage bills in England and Wales are to rise by two per cent from April, adding £8 to the average £415 annual cost for each household. A few regions will see a fall in costs.
REMEDY: You can’t switch supplier, yet in England and Wales most can switch to a water meter for free, which can lead to savings of £500 a year or more. This website, ccwater.org.uk, will help you work out if it’s worth it.
INCREASE on Monday, with basic NHS check-ups going up £1.10 to £22.70 in England and 30p to £14.30 in Wales.
REMEDY: There’s not much you can do, except make sure you get your teeth checked before the next rise comes in next year.
There’s no change in Scotland and Northern Ireland.
BILLS are going up across all the major phone networks for customers both in and out of contract.
Three and O2 customers will see a 2.5 per cent rise this year, for EE customers it’s 2.7 per cent and Vodafone customers, who took out a monthly plan on or after May 5, 2016, will see a bill hike of 2.5 per cent.
EE said customers on popular plans would typically see an increase of around 60p a month, or £7.20 a year. Some Virgin Mobile users with old contracts will also see hikes.
REMEDY: If you’re in the middle of your contract there is nothing you can do. Otherwise, shop around or ask for your network to match its best deals for new customers.
Even with sought-after phones like a Samsung Galaxy Note 9, you can get £50 cashback on top of a cheap-ish tariff from Mobile Phones Direct.
THE TV licence fee is going to rise on Monday. Colour is going up £4 to £154.50, and black and white by £1.50 to £52.
REMEDY: Lots of people don’t have licences – you only need one if you watch or record live TV or use the BBC iPlayer.
If you can live without these, try watching subscription services such as Netflix or Amazon instead.
Also, those aged 75 or over don’t need to pay.
SKY said customers will see an average increase of 5.1 per cent in their bills, with Sky Entertainment, Sky Fibre Broadband and Sky Talk Anytime going up £2 per month for each service.
BT, Virgin Media and TalkTalk are not hiking their prices next month, but they have all inflicted rises on at least some of their customers in recent months.
REMEDY: If you’re outside your minimum contract term for TV, phone and/or broadband, you can leave penalty-free at any time. Ring Sky and ask them to match discounts for new customers, which can be generous. Or swap to a new provider.
If you’re still within your minimum term for a Sky broadband or phone contract, you can cancel penalty-free if you contact them within 31 days of them telling you about the hike.
If this time has already expired, wait until your contract ends and then negotiate a better deal.
If you’re still in contract with Sky TV, you’ll have to wait until your deal ends as there is a penalty for leaving
INCOME TAX
MOST workers will pay less tax from next week due to changes in the income tax threshold.
The personal allowance – the amount you can earn per year before paying income tax – rises from £11,850 to £12,500. The higher rate of tax, which starts at £46,350 at the moment, will start from £50,000.
The increases mean an annual saving of £130 for basic rate taxpayers, £860 for higher rate taxpayers and £600 for additional rate taxpayers. National Insurance changes, however, will reduce gains for higher rate payers to around £500, says Deloitte.
PENSIONS
MILLIONS of employees on work pension schemes will see take-home pay hit from next week as their pension contributions go up.
Currently they pay in three per cent of their salary but that will rise to five per cent, although it may only apply to part of their salary rather than the whole lot.
Employers’ minimum contributions are also due to rise, from two per cent of a workers’ salary to three. This means someone earning £15,000 will typically take home £49 less if they pay contributions on their entire salary.
For someone on £30,000, they will take home £253 less.
But it’s ultimately good news because you’re saving more for your pension, which most people need to do, and you’re getting money from your employer you wouldn’t have otherwise got. Plus the dent in your take-home pay is offset by the income tax gains.
INHERITANCE TAX
THE amount homeowners can pass on to their descendants is set to increase.
The basic amount anyone can pass on tax-free is £325,000, but you also get an extra allowance if you are passing on your home.
This year that bonus allowance for passing property to a direct descendant will increase from £125,000 to £150,000, taking the total tax-free allowance to £475,000.
If a husband or wife dies they can pass on assets tax-free to their spouse, and the spouse can then use both allowances when they die, meaning the amount which can be passed on by a married couple will be £950,000.
A further increase next year will bring this amount to £1million.
