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How Today’s Tax Changes Affects Households

Changes to COVID support measures, as well as new measures being introduced to household bills and taxes, may mean changes to your personal finances. All UK households are being urged to arm themselves with all the information on the financial changes being introduced today, the start of the new tax year.

The Financial Conduct Authority have already announced that mortgage lenders could enforce repossession of homes, following a ban during COVID to support struggling households. However, whilst households can no longer apply for a deferral on mortgage, loan or credit card repayments, lenders are still being strongly encouraged to take personal circumstances into consideration in order to continue protecting the vulnerable. Another welcome bit of news for those struggling to make repayments is that bailiffs are unable to be appointed by courts before the end of May, providing some breathing space for households. However, this marks the start of the inevitable withdrawal of support measures introduced during COVID.

For buyers, the news is much more welcoming with the new Help to Buy scheme now in force. Whilst this is restricted to first time buyers, it offers a generous 20% equity loan and a 75% mortgage meaning buyers need only produce 5% of the total property price in order to proceed with the purchase of their first home.

As for household bills, we are set to see a hike in many areas, including council tax which will increase by an average of 4.4% in England. Whilst there is very little households can do to combat this increase, they are being encouraged to shop around for cheaper energy providers as the energy price cap is set to rise by £96 a year to £1,138 based on the typical household usage.

Small little hikes to many areas will soon start to add up, however, the new tax year also sees a rise in income tax thresholds with the personal allowance being increased to £12,570 for the standard rate. Households can also see very small rises in Marriage Allowance, State Pensions, Child Benefits, and the National Living Wage.

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