6 money changes to watch out for in May

A raft of changes could affect your wallet this month, from prescription fees going up to interest rates being cut. We explain everything you need to know.

Calendar showing May 2024
(Image credit: Getty Images)

While many financial changes happen in April every year, households should also watch out for a raft of changes hitting their wallets in May.

From prescription fees and probate costs going up to savings rates going down, we reveal what’s happening this month.

To keep up-to-date on other key changes, check out our 2024 money dates guide.

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1, Prescription charges rise

Prescription costs are going up today (1 May). They will rise by 2.59%, meaning a prescription will cost £9.90 for each medicine or appliance dispensed, an increase of 25 pence.

Charges for wigs and fabric supports will also increase by 2.59%.

The three-month prescription prepayment certificate (PPC) will now cost £32.05 while the 12-month PPC will cost £114.50.  

According to Which?, if you buy four or more prescriptions in three months, or 12 or more prescriptions in 12 months, you’ll save money with a PPC.

The consumer group describes PPCs as like a ‘season ticket’, as it will cover all your NHS prescriptions, including dental prescriptions, no matter how many items you need.

The hormone replacement therapy (HRT) PPC, which lasts for 12 months, is also going up, from £19.30 to £19.80.

2, Probate fees hiked

Grieving families will be hit by a 10% increase to the cost of applying for probate from 1 May.

The fee will go up from £273 to £300.

Probate is the legal process of dealing with a person's death, and is often required to access the deceased's assets, such as bank accounts, property and investments.

The extra expense comes at a time when many families are suffering long delays to get the grant of probate.

According to the government, someone should usually get the grant of probate within 16 weeks of submitting an application.

However, a Freedom of Information (FoI) request obtained from the Ministry of Justice by Quilter, the wealth manager, found that the number of probate cases taking over a year to be granted has risen by 65% over the past three years.

3, Free childcare for babies opens for applications

Working parents of babies aged nine months and older will be able to apply for 15 hours of free childcare from 12 May ahead of its September rollout.

Families are being encouraged to apply early to ensure they can secure a place with an approved childcare provider.

These include childminders, nannies, playschemes, nurseries and clubs.

Working parents of two-year-olds started receiving 15 hours of free childcare last month (April), as part of the government’s plan to widen childcare support to children aged between nine months and two years

The final phase of the rollout will come into effect in September 2025, when the allowance will be doubled to 30 hours for all children aged nine months to school age.

4, Energy price cap announcement

The new energy price cap for July to September will be announced on 24 May.

The price cap sets the maximum unit rates energy firms can charge per kilowatt hour (kWh) for gas and electricity, along with standing charges. It is not a cap on your total energy bill, which will mostly be determined by your energy usage.

The price cap is decided by Ofgem, the energy regulator, every three months.

The current April to June energy price cap is set at £1,690 a year for the typical direct debit customer using gas and electricity.

The cap was good news for households who enjoyed a 12% drop in their energy bills when the price cap came into effect on Easter Monday.

Energy costs are forecast to drop further, with the analyst Cornwall Insights predicting that the July to September cap will fall to around £1,560.

5, Interest rate decision

The Bank of England will make its third interest rate announcement of the year on 9 May. 

The Bank's Monetary Policy Committee (MPC) has so far kept interest rates at 5.25% for five consecutive meetings.

While mortgage lenders have been hiking rates in recent days, it is widely expected that the MPC’s next rate change will be cutting interest rates rather than increasing them.

However, this may not happen this month. Earlier this year, analysts were forecasting three or four interest rate cuts in 2024, with the first coming in May or June.

But this is now looking increasingly unlikely, given inflation has fallen faster than expected.

Most experts are predicting the first interest rate cut to come in August or September.

6, Santander to cut the rate on its 5.2% Easy Access Saver

Santander will slash the rate on its popular Easy Access Saver Limited Edition (Issue 3) account on 20 May.

It currently pays 5.2% on balances between £1 and £250,000, but this will drop to 4.2%.

The account is closed to new customers, but existing savers can deposit up to £250,000 in the account and earn 5.2%. There is no interest paid on balances above £250,000.

Santander says it is cutting the rate due to “current market conditions.”

The best easy-access savings rate open to new customers is currently from Cahoot, which is actually a division of Santander. The Cahoot Sunny Day Saver pays 5.2% on balances up to £3,000. Any sum above that receives no interest.

Ruth Emery
Contributing editor

Ruth is passionate about helping people feel more confident about their finances. She was previously editor of Times Money Mentor, and prior to that was deputy Money editor at The Sunday Times. 

A multi-award winning journalist, Ruth started her career on a pensions magazine at the FT Group, and has also worked at Money Observer and Money Advice Service. 

Outside of work, she is a mum to two young children, a magistrate and an NHS volunteer.