The big April money changes – which taxes and bills have gone up?
A number of major money changes have taken effect this April - from council tax rises to state pension increase - see which ones impact you
A glut of major money changes have come into effect this month that could impact your finances – from bill hikes, to tax changes and state pension rises.
And while April is mostly about the end of the tax year, it is also a time when providers typically increase your bills, so much so the month is often dubbed 'awful April'.
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1 April - hikes to household bills
A host of household bills rose on 1 April, including council tax, water bills and the TV Licence.
Council tax
Council tax is set by each individual local authority so how much yours has gone up depends on where you live. However, you are likely to have seen a hike of 5%.
Some local authorities were given permission to raise bills by more than this due to funding cuts and low existing rates, including Windsor and Maidenhead and North Somerset.
If your council tax has gone up, you could potentially save money by checking and challenging your council tax band. Just be wary that you might be put into a higher band and have to pay more.
Water bills
Water bills have risen by up to 13% to cover the cost of investment in the pipe and sewage network.
How much more you’ll pay depends on where you live as charges vary depending on your water firm.
Southern Water customers’ bills have risen by £55 a year while households serviced by Thames Water are seeing a rise of just £3 a year.
You could lower your water bill by signing up for a water meter. These charge you based on your actual usage rather than an estimate and can be cheaper if you’re a low-usage household.
You can also make simple, practical steps to reduce the amount of water you use. For example, by having more showers than baths or by installing water-saving gadgets like tap inserts and garden hose nozzles.
TV Licence fee
The BBC TV Licence fee has also been hiked from £174.50 to £180. You might be able to get a discount or free TV licence if you’re blind or 75 or older and on Pension Credit.
Broadband and mobile phone contracts
A swathe of broadband and mobile phone providers have upped their monthly prices this month.
Sky, for example, has increased the price of its broadband deals by £3 a month, and its TV packages by up to £3 per month.
Some broadband providers have promised to freeze their prices until 2027 though, including BT, Vodafone and BT. Mobile firms Voxi, Lebara and Smarty all have no mid-contract price rise policies in place as well.
You can lower the cost of what you pay for broadband and mobile phone by shopping around and switching to a better deal. Those on benefits can save by signing up for social tariffs.
1 April - new energy price cap
The new Ofgem price cap came into effect on 1 April, covering the April to June period and affecting the roughly 33 million households on it.
Due to measures announced by the government, energy bills for the average household have fallen by £117 a year (7%).
Ministers have made lowering the cost of living for Brits one of their major priorities, including how much households are paying for their gas and electricity.
However, the downslide could be short-lived – consultants at Cornwall Insight, which is well-regarded for the accuracy of its price cap predictions, have predicted that the July price cap could jump 18% higher than the April level due to the war in the Middle East.
It could make fixing your energy tariff now worth doing to save money in the long term, although these types of deals have started dwindling due to the ongoing conflict in the Middle East.
As of 20 March, there were just 20 fixed tariffs available on the market, compared to 39 on 27 February, with the cost of the cheapest fixed deal rising from £1,509 to £1,862, according to Uswitch.
1 April - April pay rises
The National Minimum Wage and National Living Wage rates went up on 1 April. For workers aged 21 and over, the minimum pay rose from £12.21 to £12.71 an hour.
Workers aged 18 to 20 saw their hourly rate hiked from £10 to £10.85, while under 18s and apprentices got a boost from £7.55 to £8.
This change, while good for lower paid workers, means extra costs for businesses already paying higher employer National Insurance contributions.
1 April - Premium Bonds prize fund rate reduced
The Premium Bonds £1 million prize winners are announced on the first working day of each month, which was April 1 this month.
However, the Premium Bonds prize fund rate was also reduced from 3.6% to 3.3% and the chances of winning went from 22,000 to 1 to 23,000 to 1. The changes mean the average Premium Bonds holder will win less often and see smaller average returns on their money.
If you don’t already have Premium Bonds, they can be a useful savings account to have as any winnings are tax-free. We explore if Premium Bonds are worth it in another article.
6 April - state pension rise
The state pension rose by 4.8% from 6 April under the Triple Lock mechanism, meaning those on a full new state pension will see their weekly payments increase from £230.25 to £241.30. The basic state pension increased from £176.45 to £184.90 a week.
If you’re happy to, you could defer receiving your state pension and receive a boosted rate when you do come to claim it.
6 April - VCT tax relief
The amount of Venture Capital Trusts (VCT) income tax relief you can get dropped from 30% to 20% on 6 April.
VCTs are funds that invest in early-stage, smaller, companies listed on the London Stock Exchange. While they have a high growth potential, they do come with higher risk. However, in return the government offers generous tax breaks.
Investors can put up to £200,000 a year into VCTs and, provided they hold the shares for five years, get tax relief, as well as tax-free dividends and capital gains.
However, a previous rate of 30% for tax relief fell to 20% on 6 April, as confirmed in the 2025 Autumn Budget.
“This could mean up to £20,000 less in tax relief for an investor making use of their full £200,000," says Charlene Young, senior pensions and savings expert at AJ Bell.
“While the income tax relief for VCT investors [has been] slashed, the Chancellor has also softened eligibility rules for companies, meaning more firms can apply for funding from the schemes to help them scale up.”
6 April - income tax thresholds freeze
Income tax thresholds have been frozen for a further year in 2026/27. They’re set to be frozen until the end of the 2030 financial year.
The threshold freeze is leading to ‘fiscal drag’ whereby taxpayers have to hand more of their money over to the taxman as their incomes rise and tax thresholds remain the same.
There are ways you reduce your overall tax bills, including gifting to charity and adding more of your salary into a workplace pension.
In addition, the inheritance tax-free allowance also remains frozen until April 2031. That includes the Nil Rate Band, Residence Nil Rate Band (RNRB) and RNRB taper threshold.
“Frozen tax thresholds punish taxpayers by stealth. When asset prices and wages rise but thresholds fail to track inflation, the result is higher tax bills," Young from AJ Bell says.
“Frozen thresholds apply beyond tax on income as well. Astonishingly, the main Inheritance Tax free threshold won’t have changed in over two decades by the time the freeze is lifted in 2031.
“Although a new exemption has been introduced since then – the residence nil rate band – it actually doesn’t compensate for frozen thresholds. Had the government done nothing whatsoever other than index the Inheritance Tax allowance to the CPI measure of inflation the standard Nil Rate Band would have ended up higher than the combined value of all IHT allowances, and we wouldn’t have had the added complexity of a new allowance.”
6 April - dividend tax rise
Dividends are paid to investors who own shares in a company, but you have to pay tax on them if you breach your annual dividend allowance, which is currently £500.
Tax is paid at set rates which went up from 6 April.
The dividend tax rate rose from 8.75% to 10.75% for basic rate taxpayers, and from 33.75% to 35.75% for higher rate taxpayers. For those who pay additional rate income tax, the dividend tax charge is unchanged at 39.35%.
You can try lowering your tax bills on dividends by using up your ISA allowance, with dividend income earned tax-free.
6 April - NHS prescription charge frozen
The cost of an NHS prescription is frozen for the 2026/27 financial year at £9.90 per item, as confirmed by the chancellor Rachel Reeves in the 2025 Autumn Budget.
You can get free NHS prescriptions if you’re aged 60 or over, under 16 or are 16 to 18 and in full time education. You may also qualify for free prescriptions if you’re on certain government benefits like Universal Credit or Pension Credit.
6 April - homeworking tax abolished
The tax relief you can get from working from home to cover expenses has been ditched this month, as confirmed in the 2025 Autumn Budget.
The move is expected to raise £100 million for Labour by 2030/31, but will leave thousands of home workers up to £140.40 worse off each year.
