New financial year 2024: what’s changed?

A mum and child baking together in the kitchen.
Financial changes in April 2024 and what that means for your pocket. 

In April, we see warmer days, lighter evenings, and the start of a new financial year. April marks some significant financial changes and a crucial period for individuals and families who are planning their budgets.

In this blog, we’ll explore the practical implications of the April 2024 financial changes and how these changes might impact your finances.

In the UK, the new financial year usually starts on 6 April.

What’s changed in April 2024?

National living Wage increase 2024

National Living Wage has risen from £10.42 to £11.44 an hour from 1 April 2024. Those aged 21 and 22 are now also eligible to receive it. This could increase the pay packets of those on full-time contracts by more than £1,900 per year.

Benefit Increase April 2024

Most social security (benefits) were increased by 6.7% in April. This means the basic rate of out of work Universal Credit will rise by around £300 a year for a single person aged 25 or over.

Cost of Living Payments that helped lower-income households through the last few years have now finished.

Local Housing Allowance increase

Local Housing Allowance (LHA) determines the maximum amount individuals renting from private landlords can receive in Housing Benefit or Universal Credit Housing Element. This allowance is calculated based on factors such as age, location and the required number of bedrooms.

Local Housing Allowance had been frozen at 2019 levels even though rents have skyrocketed since then. Thankfully, LHA has now been adjusted to represent local market levels providing relief to more than 1.3 million low-income renting households. This means that the maximum support for a three-bed property will rise by £81 per week in Bristol, £62 in South East London, and £51 per week in Glasgow.

National Insurance tax cut

National Insurance contributions have been reduced by 2% for employed workers. Self-employed individuals will see a 3% cut. This change is expected to benefit nearly half a million families, with an average gain of £1,260 per family. 

Council tax increase 2024/25

Council Tax rates have increased for the majority of residents in England and Wales. In England, council tax has risen by an average of 5.1% and in Wales, council tax has risen by an average of 7.7%. In Scotland, council tax is being frozen.

Energy Price Cap April 2024

Between 1 April to 30 June 2024 the energy price cap is set at £1,690 per year for a typical household who use electricity and gas and pay by Direct Debit. This is £238 lower than the cap set between 1 January to 31 March 2024 (£1,928). The price cap makes sure that prices for people on a standard variable tariff (default tariff) are fair and that they reflect the cost of energy.

Households have also benefited from levelisation” under the Energy Price Cap. This means the standing charge remains the same for both direct debit and prepayment meter (PPM) customers.