Money Mensch: It's time to spring clean your budget
Spring's shown its face, which means it's time to rewrite your budget. April was the big price-change month for the NHS, local authorities, utility firms and more. Normally we see a host of prices rises. Yet, as prices often depend on inflation and last year that was negative, there are some ups and downs and, with inflation now booming, we can expect big rises in 12 months' time.
● The Basic State Pension - it's gone UP!
Those entitled to the state pension will feel more in their pockets: it's increased from £95.25 to £97.65 per week for singles and £152.30 to £156.15 for couples. While £100 a year might not sound like much, it's actually better than it could have been, as pension usually rises with September's inflation figures and they were negative, so it could have shrunk. Yet the additional top-up, called the second state pension, which some get, is frozen.
Yet there are literally millions of pensioners still missing out on serious cash. Any pensions on relatively low incomes should check whether they're entitled to the pension credit.
This will ensure all pensioners have a minimum income of £132, and, even if you have savings above this level, you may still be able to claim something. You can check on 0800 99 1234.
● New cash Isa allowances for everyone
The amount you can put away in a cash ISA has increased. It used to be £3,600 per person, unless you were over 50, in which case it was £5,100. Now it's £5,100 for everyone and the total ISA allowance, if you include stocks and shares, is £10,200. For info on the best payers go to www.moneysavingexpert.com/cashISA
● NHS prescription
The cost of prescriptions has dropped from £4 to £3 in Scotland, while in England they have been held at £7.20 each. Some have faired even better though, as Northern Ireland has joined Wales in getting them totally free.
Yet, even if you live where prescriptions are charged for, there are ways to cut the cost. Check if you're eligible for them free anyway, such as under-16s, over-60s, in full time education between 16 and 18, are pregnant or in the first year after a baby is born, on various benefits or have a valid medical exemption certificate.
If that doesn't work and you regularly pay for NHS prescriptions, consider buying a pre-pay annual certificate, which covers all of your prescriptions. In Scotland, the cost is £10 for four months and £28 for a year, while in England it's £28 for three months, and £104 over a year.
Regular prescription getters could save £100s. Forms are available at Post Offices, some pharmacies or you can call 0845 850 0030.
● BT extends high calls charges in the evenings.
BT has cleverly shifted its cheaper off-peak times to 7pm-7am, rather than 6pm-6am. So they have made an unpopular hour in the morning free rather than a more popular one in the evening. If you are on BT's free weekend and evening package, a call between 6pm and 7pm that used to be completely free will now cost you over £3. Fellow telecoms provider Talk Talk is due to make the same switch in June.
● Stamp prices up 2p
For a standard sized envelope, it's now 41p for first class and 32p for second class.
● Student Loans will rise to 4.4% in September
Every Septemeber, the Student Loan interest rate changes based specifically on March's RPI inflation figure. It was shockingly high 4.4 per cent, meaning many face a big cost jump.
Former students who started before 1998 are currently seeing their loans shrink, with 0.4 per cent rates. Yet that'll almost certainly jump to 4.4 per cent in September. For more recent students currently paying 0 per cent, the rules state the rate should be the lower of March's RPI (4.4 per cent) or the base rate of a range of banks plus 1 per cent (currently 1.5 per cent, but of course it could change). The government won't confirm this until August.
Don't panic though. Until September, it's 0 per cent at worst, so if you have spare cash, save it at high interest and earn more than the loan costs. Then re-evaluate. If, by then, savings don't pay more than the interest cost, use the savings to overpay the loan.
● Personal tax allowances frozen
Personal allowances are the amount anyone in the UK can earn from work or savings before they pay income tax. It means that, as wages are still rising, but tax limits aren't, you end up paying more. The standard allowance is £6,475. Older people get more. For the over 65s, it's £9,490 and for those over 75 it's £9,640. However, earn more than £22,900 and it reduces gradually until it's the same level as everyone else.
● Big earners pay more
There's a new 50 per cent tax payable on any earnings over £150,000, and personal allowances are reduced for those on over £100,000.