18 key dates and changes that could hit your finances this year – and how to fix them
BRITAIN'S finances are in for a year of upheaval as we face a whole raft of new measures including new benefits rules, the end of some coronavirus help schemes and even several price hikes.
Some of these changes will make life easier for struggling families, but others could leave you out of pocket if you aren't prepared.
To make life easier and to help you keep your finances in order we've rounded up all the key dates for 2021, what's changing, and steps you can take to protect your income.
- Self-employed grant deadline – January 29
The government has extended the help available to self-employed people who have been impacted by the coronavirus pandemic.
A third grant, available under the Self-Employed Income Support Scheme is open for applications now, but closes on January 29.
The grant is worth 80% of average monthly trading profits, paid out in a single instalment covering three months and capped at £7,500 in total.
You can find out more about whether you are eligible and make a claim for support via the government's website.
- Self-employed tax payments due – January 31
There are more the five million self-employed people in the UK with the numbers of people working for themselves growing each year.
If you are self-employed, you need to submit your self-assessment and pay your tax bill by January 31 or you could be charged a penalty and asked to pay interest.
HMRC can also collect what you owe through various channels including a debt collection agency and can even take you to court.
Different payment methods take different amounts of time to clear, so you may need to make the payment up to five working days in advance. Find out more on how to pay your bill here.
- Changes to investments and pensions options – February 1
The financial watchdog responsible for investments has created new rules designed to make it easier to navigate retirement options.
From February this year, your pension provider will have to offer "investment pathways", which are supposed to guide you towards one of four different retirement plans based on your circumstances.
For people due to retire after February, this means you will be offered four different scenarios and offered a pathway that best meets your needs. However, these will all be offered by your current pension provider, meaning you may not be getting the best solution on the market.
Shopping around and taking advice is the best way to find a retirement plan to make the most of your pensions savings.
Anyone retiring in the next month will not automatically be offered pathways, which means the risks of making poor choices are even higher. Waiting until February before accessing your retirement funds would mean you can take advantage the new scheme.
How to cut your bills
IF you’re struggling financially, you might be able to cut the cost of your bills to help you get out of the red.
Council tax: You can apply for a council tax reduction on the Gov.uk website but you'll need to meet certain criteria. Your bill could be cut by as much as 100 per cent if you’re on a low income or claim benefits. Carers who look after someone in the household for at least 35 hours a week are also exempt from paying.
Water: Households might be able to save money by getting a water meter but it all depends on how much you're using. To check if it's finacially worthwhile, use the Consumer Council for Water's free ater meter calculator.
Rent: If you have the space available and your landlord or local authority says it's ok to do so, you might want to consider getting a flatmate. Not only will you split the cost of the rent, but also the other bills.
Hire purchase: If you're struggling to make your repayments on your hire purchase, you can usually end the contract by returning the goods. You will have to pay all the instalments due up to the time you end the agreement but this will limit the amount you owe. Contact Citizens Advice for free for more help with this.
Gas and electricty: MoneySavingExpert says families can save £330 on average by switching from Standard Variable Tariffs (SVTs) to a better rate. Use a comparison site such as MoneySuperMarket or Energyhelpline to see what deals are available.
Mortgage: If you get into debt with your mortgage payments, don't wait for your lender to chase you. Work out what you can afford using the Citizens Advice budgeting tool so you can discuss your payment options moving forward with your mortgage provider.
Secured Loan: Your secured loan might be covered by the Consumer Credit Act and if it is, you may be able to apply for a Time Order. This is a special agreement by the courts allowing you more time to make payments. Secured loans not covered by the Consumer Credit Act include gas, electricity or water meters, payments that need to be written off in full, mortgages, credit union loans, loans from an employer and some short term trade agreements.
County Court Judgements: If you receive a County Court claim form talk to a free debt advice service straight away. This includes Citizens Advice (0808 800 9060), StepChange (0800 138 1111) and the National Debtline (0808 808 4000).
TV licence: Some households are eligible for a reduced fee or free TV Licence. Pensioners over the age of 75 currently get a free TV licence, although this is due to change later in 2020. Check here to see if you are entitled to a reduced or free rate.
- Scottish Child Payment comes into effect – February 22
Scotland has launched a new child payment scheme which pays Scottish families £10 per week for each child under six.
The scheme is available for households that get certain benefits such as Universal Credit, income-related Jobseeker's Allowance (JSA), income-related Employment and Support Allowance (ESA), Housing Benefit, Income Support or tax credits.
You can apply now through mygov.scot but you will not get a decision untilafter February 15. The first payments will start arriving from February 22, but the government has warned it could take longer due to high demand.
- Rail fare rises – March 1
From March 1, rail prices will rise by 2.6% across the UK. This hike was due to happen this month, but has been delayed thanks to coronavirus.
If you're due to buy a new season ticket, you should do so before the price hikes come into place.
You can also cut the cost of train travel with railcards, split tickets and advance fairs. Here's all our top tips for saving money on rail travel.
- Spring budget – March 3
The government has confirmed that the next budget will be announced on March 3.
It is far too early to know what will be included, but throughout the pandemic, the government has hinted at hiking taxes to tackle Britain's spiralling Covid debt.
For instance, 2021 could see an overhaul of capital gains tax after Sunak ordered a review of the tax as the Government looks for ways to plug the black hole in the nation’s finances.
- End to stamp duty holiday – March 31
The government's stamp duty holiday for properties over £500,000 is due to end on March 31, although there have been calls from the property industry for the measure to be extended.
There are currently 418,000 home sales in progress to completion, according to property website Zoopla.
As the March 31 deadline is a "cliff edge" any buyers who do not complete by this date will be liable to pay their stamp duty bill.
Buyers still in the process of moving should be doing everything they can to get their sales through in time, and many have said that they will cancel their planned move if they have to pay the tax due to delays.
If you are selling your house, be wary that as the deadline approaches there is a possibility that your buyers could pull out if you don't complete on time.
- Energy price cap rises – March 31
New proposals by the energy watchdog mean your gas and electricity bills are likely to rise by £21 from March 31.
Ofgem is recommending that the price cap – the maximum amount Brits can pay for energy bills – is lifted from £1,042 to £1,063.
Only the worst energy deals, which are called Standard Variable Tariffs, are charged at the price cap, so you should definitely check to see whether you can switch and save money.
Switching to a more competitive rate can save you £300 per year. Here's how to compare the best deals.
- Applications for payment holidays are due to end
Struggling families with debts including mortgages, credit card bills, loans and buy now, pay later arrangements have been offered payment holidays to help them weather the pandemic.
The last application date for most of these holidays has been set at March 31, although it is possible this could be extended further.
If you need a payment break, you would be wise to ask before that deadline in case the scheme comes to an end as planned.
Even though a coronavirus-related payment holiday won't affect your credit score, it should always be a last resort as your debt will continue to accrue interest meaning you'll pay more over time.
Experts are advising that you should only take a payments break if you really need one and have exhausted your other options.
How to get help for free
THERE are lots of groups who can help you with your problem debts.
- Citizens Advice – 0808 800 9060
- StepChange – 0800 138 1111
- National Debtline – 0808 808 4000
- Debt Advice Foundation – 0800 043 4050
You can also find information about Debt Management Plans (DMP) and Individual Voluntary Arrangements (IVA) on the Money Advice Service website and on the Government's Gov.uk site.
Speak to one of these organisations – don't be tempted to use a claims management firm that will claim it can write-off lots of your debts in return for a large up-front fee.
- Deadline for Help To Buy homes to be completed under the old scheme
Anyone who bought a house under the old Help to Buy scheme and reserved their home before June 30, 2020 needs to have completed on the sale by March 31 this year.
If you reserved your home on July 1, 2020 or later, you may be able to get an extension to complete by May 31 this year.
If you don’t complete by these dates you will not be able to get the equity loan funds.
If the construction of your home has been severely delayed, Homes England may give you an extension to legally complete, but this will be dealt with on a case by case basis.
The new scheme is now open for homes built from April 1, and you can find out everything you need to know about applying here.
- Changes to pay and income tax
In his November spending review, Rishi Sunak announced a raft of changes to what people get paid from April this year.
Whether this is good or bad news for your finances depends on whether you work in the private or public sector, how much you earn and what your job is.
The National Living Wage for workers over 23 will rise to £8.91 per hour from April. National Minimum wages were also boosted meaning that workers under 23 will also benefit.
People aged 21 and 22 will see their wages bumped up from £8.20 to £8.36, while 18 to 20 year olds' pay will go from £6.45 to £6.56.
Those aged 16 and 17 will see wages increased from £4.55 to £4.62, while pay for apprentices will be £4.15 instead of £4.30.
At the same time, income tax thresholds are set to rise, meaning you can earn more money before paying tax.
The increase is small – at just 0.5% – which should move the allowance to £12,570 for basic rate taxpayers and £50,270 for higher rate taxpayers.
In the public sector, the chancellor said that nurses, doctors and other NHS staff will be getting a pay rise from April this year.
Other public sector workers are in for a more gloomy year as a pay freeze has been introduced. Anyone earning under £24k is protected from this and can still get salary rises.
- Council Tax rises
Councils have permission to raise council tax by up to 5% from April, meaning lots of us are likely to see our bills go up.
Local authorities can hike bills by 2% without holding a referendum for local people, but if they want to go above that, they will need to hold a vote.
If you are struggling to pay your council tax, there are plenty of things you can do, including spreading payments over 12 months, challenging your council tax band, and applying for support or the hardship fund.
- End to Universal Credit boost
To help low income families, the government introduced a boost to Universal Credit of £20 per week (£1,040 a year).
This additional income is due to come to an end from April this year, meaning claimants will likely see payments fall.
Charities have urged the government to extend the support but so far there has been no confirmation that it plans to do this.
- Increases in benefits payments
While payments will fall overall due to the end of the pandemic boost, standard allowances will rise above their pre-Covid levels by a small amount.
The increases depend on individual circumstances like age, whether you have any disability and if you have children or are a carer.
For example, the standard allowance for single people aged under 25 will rise from £256.05 to £257.33, and from £323.22 to £324.84 for those who are older.
The child element is also rising slightly at the start of the new tax year. The amount for a first child will rise to £282.50, up from £281.25.
You can see all of the changes to Universal Credit including what the new payment rates will be in our explainer.
Other benefits are also rising slightly including the Carer's Allowance rising from £67.25 to £67.70 per week and the Widowed Parents Allowance rising from £121.95 to £122.55.
The government has detailed all the changes to all the benefits on its website.
What to do if you can’t pay your bills
FALLING behind on your energy bills can be extremely stressful.
If you’re struggling to pay what you owe, contact your supplier as soon as possible.
Your provider has to help you come up with a solution, and you should be able to negotiate a deal that works for you both.
One option is to agree a payment plan where you pay off your debts in affordable instalments.
You may be able to pay off your debts directly from your benefits through the Fuel Direct Scheme.
A fixed amount will automatically be taken to cover what you owe plus your usage.
To be eligible, you must be getting one of the following benefits:
- Income-based jobseeker’s allowance
- Income support
- income-related employment and support allowance
- Pension credit
- Universal Credit (but only if you’re not working)
If you cannot come to an agreement with your supplier, they may try to force you to get a prepayment meter installed.
In very rare cases, where you refuse to negotiate, your supplier might threaten you with disconnection.
- Pensions changes – April 6
Retirees will see a significant boost to their income from April 6 as the state pension is set to increase by 2.5% under the triple-lock promise.
As a result, the new state pension will rise by £4.40 a week to £179.60 – an increase of £228.80 over the year.
The old basic state pension will increase by £3.40 a week to £137.65 – giving pensioners an extra £176.80 over 12 months.
People saving into private pensions could also see a small boost as the lifetime allowance (the maximum amount you can save for a pension) will rise by 0.5% to £1,078,900.
- End of Lifetime Isa relaxation rules – April 6
The government changed the rules around Lifetime Isas to help savers that might be struggling with coronavirus.
Lifetime Isas are designed to help people save for a first home or a pension, meaning there are penalties if you use your money for anything else.
Under the normal rules, if you take your money out for other reasons the government charges you 25% meaning you lose your government top up as well as some of your original savings.
But the new rules mean that you only pay a charge of 20% which means you only lose the government bonus and not any of the cash you put away.
You're still giving up your free government cash, so you should exhaust your other options before raiding your Lisa.
These changes are currently only in force until the end of the tax year, so if you want to access your cash you need to do so before then.
- Furlough ends – April 30
The government's furlough scheme, which was put in place to protect employees who are not needed at work in the coronavirus pandemic, is due to close on April 30.
The chancellor has extended the scheme several times so far, so if the crisis is still ongoing there could be further announcements.
The Treasury has pledged to announced the next stage in its plans to protect jobs in the March budget.
- Changes to Universal Credit advance system – October 21
From October 21, the government is changing how it collects advance payments.
Under the new rules, the maximum repayment period will rise from a year 16 months meaning people's monthly payments will drop.
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