The big money changes coming in April – are you ready?
The end of the financial year offers the chance to take a fresh look at your finances, but there are several April money changes where you may need to act fast to avoid extra costs.
A glut of major money changes are coming in April that could impact your finances – from bill hikes, topping up your ISA to taking advantage of VCTs and state pension changes.
And while April is mostly about the end of the tax year, it is also a time when providers typically increase your bills.
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1 April - hikes to household bills
A host of household bills will rise from 1 April, including council tax, water bills and the TV Licence.
Council tax
The majority of local authorities in England are expected to raise council tax, although by how much will depend on where you live. You will likely see a hike of around 5%.
Some local authorities have been 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 you’re facing a hike to your council tax, 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 are set to rise 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 will see their bills rise by £55 a year while households serviced by Thames Water will only see a rise of £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 will also be hiked in April 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 are upping their monthly prices from next month.
Sky, for example, is upping 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 - Premium Bonds prize fund rate reduced
The Premium Bonds £1 million prize winners are announced on the first working day of each month, which is April 1 next month.
All the winners of prizes ranging between £25 and £100,000 can check whether they’ve won anything the following day (April 2) via the Premium Bonds prize checker app or by visiting the NS&I website.
However, the Premium Bonds prize fund rate will be reduced from 3.6% to 3.3% and the chances of winning will be going from 22,000 to 1 to 23,000 to 1 from April. 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.
1 April - new energy price cap
The new Ofgem price cap will come 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 will fall 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 10% 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 6 March, there were 22 fewer fixed energy tariffs on the market than there were a week prior (27 February), with the cost of the cheapest fixed deal rising from £1,509 to £1,640 over that period, according to Uswitch.
1 April - April pay rises
The National Minimum Wage and National Living Wage rates will rise again in April. For workers aged 21 and over pay will rise from £12.21 to £12.71 an hour.
Workers aged 18 to 20 will see their hourly rate hiked from £10 to £10.85, while under 18s and apprentices will get a boost from £7.55 to £8.
This change, while good for lower paid workers, will mean extra costs for businesses on top of already higher employer National Insurance contributions.
6 April - state pension rise
The state pension will rise 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 will increase 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 is dropping from 30% to 20% on 6 April.
VCTs are funds that invest in early-stage, smaller, companies not listed on the main stock market. This makes them riskier to invest in, but 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 30% tax relief, as well as tax-free dividends and capital gains.
However, this 30% tax relief will fall to 20% from 6 April, as confirmed in the 2025 Autumn Budget.
If you’re considering investing in VCTs, you have just a few weeks left before the end of the tax year to receive this higher tax relief rate.
6 April - NHS prescription charge frozen
The cost of an NHS prescription will be 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 - income tax thresholds freeze
Income tax thresholds will be 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 bill though, including gifting to charity and adding more of your salary into a workplace pension.
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, but these are going up from 6 April.
The dividend tax rate will go up 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 will remain 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 - homeworking tax abolished
The tax relief you can get from working from home to cover expenses will be ditched from next 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.
