With inflation falling and interest rates being held at 5.25 percent, many people will be wondering if this means they are in for a better year financially in 2024.
As the cost of living crisis continues, many people will be looking to budget and prepare for the new year so their finances won’t feel as stretching.
There are some dates already mentioned that will affect one’s bill next year that they can take note of now so they’re not surprised when these changes take place.
This includes energy, council tax and TV licence bills, as well as more cost of living payments on the way, new rules for childcare and important deadlines that could see people claim back tens of thousands of pounds.
Ofgem price cap
Between January 1 to March 331, 2024 the energy price cap is set at £1,928 a year for a typical household who uses gas and electricity and pays their bills by Direct Debit. This will take the price cap from £1,834 to £1,928 per year.
The price cap is not a total limit on how much people can pay for energy – instead, it sets the unit rates for gas and electricity, as well as the standing charges.
From next year the unit rate will be 29p/kWh for electricity and 7p/kWh for gas. The average daily standing charge will be 53 p/day for electricity and 30 p/day for gas.
New tax rules for side hustles
HMRC has now signed up to the Organisation for Economic Co-operation and Development (OECD) rules, which will allow it to investigate the tax affairs of people earning an income via side hustles. This includes popular sites such as eBay, Vinted, Etsy, Uber, Deliveroo, Fiverr, AirBnb and TaskRabbit.
They won’t need to declare what they earn if they make less than £1,000 during a tax year (April 6 – April 5), as it can be covered by the trading allowance. This applies to income from activities such as selling goods or services.
Free child care
Applications open on January 2 for the first wave of new government-funded childcare offers. Eligible working parents of two year olds will be able to register to access 15 hours free childcare per week from April 2024.
This is the first step in the government’s long-term plan to give working families a brighter future. The recommended time to register is between mid-January and the end of February.
National insurance cuts
In the Autumn Statement a few months ago, Chancellor Jeremy Hunt announced changes to National Insurance contributions (NICs)
These changes are:
- a cut in the main rate of NICs paid by employees (‘primary Class 1 NICs’) from 12 percent to 10 percent. This rate cut would apply from January 6, 2024
- a cut in the main rate of NICs paid by the self-employed (‘Class 4 NICs’) from nine percent to eight percent. This rate cut would apply from April 6, 2024.
- cancelling the requirement of the self-employed to pay the flat rate NICs charge (‘Class 2 NICs’), which applies when someone’s annual profit exceeds a set threshold (the ‘lower profits threshold’). This threshold is currently £12,570. This change would take effect from April 6, 2024.
Online self-assessment
Those filing their tax return online for the year 2022-2023, must submit this to HMRC by midnight on January 31, 2024.
They will also need to pay any tax they owe by this date, including the first instalment of any payments on account for the 2023-2024 tax year and any balancing payments owed from 2022-2023.
£299 cost of living payment
The third and final cost of living payment worth £299 and will be sent to most eligible people between February 6 and February 22. They need to have been entitled to a payment for a qualifying benefit between November 13 and December 12 to get the cost of living cash.
The full list of benefits that qualify for the third cost of living payment are:
- Universal Credit
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Income Support
- Working Tax Credit
- Child Tax Credit
- Pension Credit
Bereavement support deadline
The Department for Work and Pensions (DWP) has changed the rules surrounding bereavement benefits. Now, couples who were cohabiting and have dependent children are also eligible which they weren’t before.
It is possible to backdate claims, but people only have until February 8, 2024, to apply – after this date, they may not get the full amount of payments owed.
Train fare increase
In England, regulated rail fares will increase by up to 4.9 percent from March 3, 2024.
Regulated rail fares include season tickets on most commuter journeys, some off-peak return tickets on long-distance routes and flexible tickets for travel around major cities. The government said the new 4.9 percent cap is lower than the equivalent in Scotland, where prices will increase by up to 8.7 percent.
