13 changes to tax and benefits that take effect today
Here are some of the big ones, and how they could impact your finances.
Increased personal allowance
The personal allowance covers how much you can earn each year before paying income tax.
And it has increased from £12,500 to £12,570. The government announced at the Budget that it will be frozen at this level for the next five years.
Higher tax threshold
The point at which you start paying the higher rate of income tax has also jumped.
Now, you will only start paying 40% on your income once you start earning above £50,271.
Statutory sick pay
The minimum payments that you enjoy when off sick are also increasing.
Qualifying workers will now get £96.35 per week through statutory sick pay.
Employment and Support Allowance
If you receive ESA, then your payments are about to rise. There are all sorts of different rates in place depending on your age and family situation, but as an example, a single person over the age of 25 will now receive £74.70, up from £74.35.
Pension credit is a top-up for low-earning pensioners. For single recipients is increasing from £173.75 to £177.10, while for couples it is increasing to £270.30 from £265.20.
If you’re off on maternity or paternity leave, then the minimum income payments you can expect are rising to a weekly rate of £151.97.
You need to earn a certain amount before you start repaying any student loans you have in your name. And that earning threshold is increasing from 6 April.
For Plan 1 loans, the threshold is rising from £19,390 to £19,895, while for Plan 2 loans it is moving from £26,575 to £27,295.
Attendance allowance is a benefit paid to those with a disability that means they need a carer to come and help them.
It is rising today from £89.15 to £89.60 at the higher rate, and from £59.70 to £60 at the lower rate.
The new tax year means a small increase in the carer’s allowance, to £67.60 from £67.25.
The widowed parents allowance applies to deaths between 11 April 1998 and 5 April 2017. Recipients will see their payments rise from £121.95 to £122.55.
Disability living allowance
The disability living allowance is paid across two components ‒ the care component and the mobility component.
The care component itself is divided into three levels, and all of these are being increased, with the highest rate now paying £89.60.
The mobility component is divided into two levels, and both of those are increasing too, with the higher level increasing to £62.55.
Personal independence payments
PIP are rising for the 2021/22 tax year. The enhanced living component is increasing to £89.60 from £89.15, while the mobility component is rising from £62.25 to £62.55.
Working tax credits
Working tax credits were hiked by £20 last year as a result of the pandemic, but that has now been removed.
Instead it is being replaced by a one-off £500 payment.