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Money advice: time to rewrite your budget
By: Martin Lewis
April was a big price change month
April was a big price change month
Money-saving expert Martin Leiws: spring is time to rewrite your budget
Spring has shown its face at last, which means it’s the key season to rewrite your budget.
April was the big price-change month for the NHS, local authorities, utility firms and more.
The current raft of movements is a bit perverse. 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.
The current raft of movements is a bit perverse. 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.
The bad news though is, with inflation now booming, expect big rises in 12 months time.
The winners
· The Basic State Pension – 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 mightn’t 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’ve 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 pensioners 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’ve savings above this level, you may still be able to claim something.
So if you’re a pensioner who’s not getting this, or perhaps you know someone who’s missing out, check on 0800 99 1234.
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 mightn’t 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’ve 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 pensioners 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’ve savings above this level, you may still be able to claim something.
So if you’re a pensioner who’s not getting this, or perhaps you know someone who’s missing out, check on 0800 99 1234.
· New cash ISA allowances for everyone
As I mentioned in my last column, 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 prices dropped
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 fared 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. First, 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’s 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, no matter how many you use in a set period. 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.
Therefore, a rough rule of thumb is that if you use more than one prescription a month, on average you save with a prepay certificate. Regular prescription getters could save £100s. Forms are available at Post Offices, some pharmacies or call 0845 850 0030.
Yet, even if you live where prescriptions are charged for, there are ways to cut the cost. First, 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’s 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, no matter how many you use in a set period. 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.
Therefore, a rough rule of thumb is that if you use more than one prescription a month, on average you save with a prepay certificate. Regular prescription getters could save £100s. Forms are available at Post Offices, some pharmacies or call 0845 850 0030.
The losers
· BT extends high calls charges in the evenings
BT’s cleverly shifted its cheaper off-peak times to 7pm to 7am, rather than 6pm to 6am. It may not sound like much of a change, but what they have done is make an unpopular hour in the morning free rather than a more popular one in the evening. That means calls in that part of the evening will be more expensive.
If you are on BT’s free weekend and evening package, a call from 6 to 7 in the evening 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, so be aware of this shift.
BT’s cleverly shifted its cheaper off-peak times to 7pm to 7am, rather than 6pm to 6am. It may not sound like much of a change, but what they have done is make an unpopular hour in the morning free rather than a more popular one in the evening. That means calls in that part of the evening will be more expensive.
If you are on BT’s free weekend and evening package, a call from 6 to 7 in the evening 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, so be aware of this shift.
· Stamp prices up 2p
Yep, that little piece of paper just got more costly. 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 September, the Student Loan interest rate changes based specifically on March's RPI inflation figure –and that’s another thing that’s only announced in April. It was a shockingly high 4.4%, meaning many face a big cost jump.
Former students who started before 1998 are currently seeing their loans shrink, with 0.4% rates. Yet that’ll almost certainly jump to 4.4% in September. For more recent students currently paying 0%, the rules state the rate should be the lower of March's RPI (4.4%) or the base rate of a range of banks + 1% (currently 1.5%, but of course it could change). The Government won't confirm this until August.
Don’t panic though. Until September, it's 0% at worst, so if you've spare cash, save it at high interest and earn more than the loan costs. Then re-evaluate in September. If, by then, savings don’t pay more than the interest cost, use the savings to overpay the loan – unless that is you’re about to get a mortgage or other borrowing, when you’d be better building up savings to reduce the amount of that debt you’ll need. See www.moneysavingexpert.com/studentrepay for a full help guide.
Every September, the Student Loan interest rate changes based specifically on March's RPI inflation figure –and that’s another thing that’s only announced in April. It was a shockingly high 4.4%, meaning many face a big cost jump.
Former students who started before 1998 are currently seeing their loans shrink, with 0.4% rates. Yet that’ll almost certainly jump to 4.4% in September. For more recent students currently paying 0%, the rules state the rate should be the lower of March's RPI (4.4%) or the base rate of a range of banks + 1% (currently 1.5%, but of course it could change). The Government won't confirm this until August.
Don’t panic though. Until September, it's 0% at worst, so if you've spare cash, save it at high interest and earn more than the loan costs. Then re-evaluate in September. If, by then, savings don’t pay more than the interest cost, use the savings to overpay the loan – unless that is you’re about to get a mortgage or other borrowing, when you’d be better building up savings to reduce the amount of that debt you’ll need. See www.moneysavingexpert.com/studentrepay for a full help guide.
· Personal tax allowances frozen
Personal allowances are the amount anyone, man, woman or child in the UK can earn from work or savings before they pay income tax. While this mightn’t sound like a ‘loser’, actually it means many will be a victim of fiscal drag.
This isn’t Alistair Darling wearing rouge, it simply 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 though. 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.
Personal allowances are the amount anyone, man, woman or child in the UK can earn from work or savings before they pay income tax. While this mightn’t sound like a ‘loser’, actually it means many will be a victim of fiscal drag.
This isn’t Alistair Darling wearing rouge, it simply 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 though. 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 will pay more
There’s a new fifty per cent tax payable on any earnings over £150,000 and personal allowances are reduced for those on over £100,000.
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TV money guru Martin Lewis runs the consumer revenge website MoneySavingExpert.com ; ensure you get his weekly e-mail so you’re constantly saving money.
