How do the April bill rises affect you?

The cost of living hit the headlines again in early April. Seven major domestic bills increased all at the same time, leading to it being called “Awful April” by some news channels. 

In this article we take a look at:

• Which bills are rising and by how much?
• How to reduce your bills.
• What to do if you can’t pay your bills.

Which bills are rising and by how much?

The seven bills that are rising are:

• Water : water bills for households are going up by £10 per month on average.
• Energy : energy bills for a household using a typical amount of gas and electricity is going up by £111 a year to £1,849 from April.
• TV, broadband and phone : A colour TV licence is rising by £5 to £174.50. Most broadband and many phone customers, particularly with longer term contracts, are also facing rises.
• Council Tax : local authorities with responsibility for delivering social care can increase council tax every year by up to 4.99%. Smaller councils without social care duties can increase bills by up to 2.99%.
• Car tax : The standard rate of tax for cars registered after April 2017 is rising £5 to £195 a year. Electric vehicles (EVs) will no longer be tax exempt. EVs registered between 1 April 2017 and 31 March 2025 will pay the standard rate, and EVs registered from April 2025 will pay £10 in the first year, then also move to the standard rate. Early adopters of EVs, registered before April 2017, will pay £20 per year.
• Higher tax : The new tax year begins on 6 April. Tax thresholds are frozen until April 2028. The Personal Allowance (at which you pay 20% tax) is £12,570 and the Higher Rate Tax (at which you pay 40% tax) is £50,270. So if your income reaches £50,270 before April 2028 you will move into the Higher Rate Tax bracket. An estimated 400,000 more taxpayers will move into the Higher Rate Tax bracket in 2025/26, 
• Stamp Duty : Stamp Duty is now payable on properties over £125,000, instead of over £250,000. The first time buyer stamp duty exemption is dropping from homes valued £425,000 to £300,000.

How to reduce your bills

The bad news is that you have no control over many of the above bills. For example, the various taxes listed above, and Stamp Duty if you are buying a home, are fixed and cannot be changed.

However, there are a few things that you can do to try and reduce your other bills. Three of the key things to do are:

• Get a better deal : for energy, broadband and phone it’s always important to try and get a better deal from your current supplier, or shop around to see if you can get a better deal elsewhere.
• Get smarter about your usage : there are often ways to reduce energy and water in the home. Check out our article April Fools? Which bills are going up – and how to keep them down! for helpful tips on how to do this.
• Check your entitlements : You may be eligible for help with certain bills. Most energy, water and broadband providers have social tariffs that can give you a better rate if you are on a lower income, even if this is only temporary. There are also various circumstances in which you may be able to get a discount on your Council Tax, for example if you are the only adult in your home, on a low income or receiving certain benefits, including Universal Credit.

So if you are struggling with bills, particularly since the rises, check out all the above to see if you can find a way to make a difference.

But if you are still struggling, let’s look at more options that you could take.

What to do if you can’t pay your bills

If you are struggling to pay your bills, the first thing to do is to identify your most urgent debts. The main three are likely to be your mortgage or rent, Council Tax and energy. These are known as priority debts. If unpaid, this could lead to serious consequences  longer term such as losing your home, having utilities cut off, or facing legal action. So these must be sorted out first.

If you can’t afford to pay these in full, it’s important to get in touch with the organisation(s) you owe money to and explain the situation. Work out how much you can pay, and you may well find that they are willing to work out a way forward with you, such as reducing your repayments or taking a payment break. 

The same applies to other bills such as loans and credit cards. If you have borrowed more money than you are now able to repay as scheduled, contact your lender to see if an alternative way forward can be found.

If you are still in financial difficulty after trying the above, there are various professional organisations who can give you information and support, and explain further options available to you. 

These include:

• MoneyHelper
• Citizens Advice
• National Debtline
• StepChange Debt Charity

Options may include applying for the Debt Respite Scheme which can provide up to 60 days protection from creditors while you get debt advice and make a plan. Or it may be time for more drastic options such as bankruptcy, an Individual Voluntary Arrangement or a Debt Relief Order. Seeking professional help can explain all these options and work out the best way forward for you.

We hope that the above information helps you to understand which bills are currently rising and how to minimise the impact on you. If at any stage you are considering a personal loan to consolidate your debts, remember that Loans 2 Go offers online loans that may be able to help.

Full details, including terms and conditions are available on our website. Borrowing is optional and may not be suitable for everyone, so always consider your circumstances and affordability before applying.

Do visit us here again soon for more financial and lifestyle tips from Loans 2 Go.