You are here: Home - Household Bills - News -

13 changes to tax and benefits that take effect today

0
Written by:
06/04/2021
We are into a new tax year, and that means a host of changes to the tax and benefit system are now kicking in.

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

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.

Parental pay

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.

Student loans

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

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.

Carer’s allowance

The new tax year means a small increase in the carer’s allowance, to £67.60 from £67.25.

Bereavement benefit

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.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

Your rights for refunds if travel is affected by strikes

There have been a wave of strikes this year across many different industries, and more are planned over Christ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week