Citizens Advice Newry, Mourne and Down has drawn attention to a number of tax and benefit changes which came into effect at the beginning of the new financial year (6th April) and that may have an affect on many household budgets.
From Thursday last, new rates for wages, benefits and tax, along with changes to pensions and savings, came into force and the charity is encouraging people to examine if the changes will affect their household finances, thus enabling them to plan accordingly.
In the last 12 months, Citizens Advice Newry, Mourne and Down assisted more than 16,500 people with queries, ranging from benefits advice and guidance on pensions and pay, to budgeting and shopping around for the best deal.
Senior Coordinator, Kellie Murray, says it is important for people to know which new rules apply to them and the difference they could make to their finances.
“Keeping on top of changes that can affect your finances is one of the key ingredients to managing your money today and planning for tomorrow,” she advised.
“Weighing up different changes can be complicated and if you’re not sure whether you’re affected or how, Citizens Advice can help. We can also help you build your money skills, from making use of technology to track your finances to working out how different deals compare.”
Citizens Advice has listed the following main changes:
Income – The National Living Wage for people over 25 rises from £7.20 to £7.50. There are also increases to the national Minimum Wage for younger workers.
The standard rates of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay is increasing from £139.58 to £140.98 per week (or 90 per cent of the person’s average weekly earnings if lower).
New claimants for ESA aged 25 or over who the government assesses as capable of working at some point in the future will receive £73.10 a week – £29.05 less than previously. This does not affect people who have already been assessed for ESA. New claimants under 25 will receive £57.90 throughout their claim.
Child tax credits will be restricted to two children. If you already have two or more children, you won’t be affected – the limit only applies to children born after April 6 2017. There are also a number of exemptions, for example for twins.
Taxes – From 6 April, the personal allowance rises from £11,000 to £11,500. This means you’ll only pay tax on earnings over £11,500. The higher rate tax threshold will also rise from £43,000 to £45,000. This means that you’ll only pay higher rate tax (40%) on earnings above £45,000.
Pensions and savings – People can access up a total £1,500 from defined contribution pensions in order to pay for financial advice, at a rate of £500 a year. You can also access free, impartial pensions guidance, from Pension Wise if you’re aged 50 or over.
The state pension will rise by 2.5% from 6 April 2017. For people who reached retirement after April 2016, this will rise to £159.55 a week and £122.30 for anyone who retired before April 2016.
The amount you can save in an ISA will rise from £15,240 to £20,000 a year, meaning that you can save more money without paying any tax on the interest you earn.
For more information or advice contact Citizens Advice Newry, Mourne and Down on 0300 3030 306 or email: adviceNMD@citizensadvice.co.uk.