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3 days ago
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As 2025 begins, how positive you feel about your finances will depend a lot on the stage of life you have reached. Hopes of sharp interest rate cuts have receded as inflation has started to rise again, which is bad news for borrowers but good news if you have money in the bank. The triple lock means a healthy increase in the state pension in April, while other benefits lag behind. Here are some of the important dates to look out for in the first months of the year.
January
1st The latest price cap on household gas and electricity comes into force, and at £1,738 for typical usage it’s 1.2% higher than that for the last three months. The headline figure is for direct debit customers using 2,700 kWh of electricity and 11,500 kWh of gas in a year – if you use more or pay in arrears you will spend more than that. The cap is £190 a year lower than in January 2024, but for many pensioner households the loss of the winter fuel allowance will more than cancel that out.
The cap on bus fares for journeys in England goes up from £2 to £3, where it will be fixed until the end of 2025. The government says that without the cap, which applies to single fares, a bus journey from Newcastle to Middlesbrough would cost £8, while travelling from Leeds to Scarborough would cost £15. The limit does not apply everywhere – Manchester, for example, will retain a £2 cap, while in London fares are capped at £1.75.
VAT is now payable on private school fees, charged at a rate of 20%. The tax will apply to fees paid in advance since 29 July 2024 if they relate to 1 January 2025 onwards. Schools do not have to pass on the full amount to parents or whoever is footing the bill, but some, including Eton, have announced that they will.
17th A ban on inflation-linked mid-contract price rises on phone, broadband and TV comes into force. From this date, the regulator, Ofcom, says contracts must include details of any future price rises in pounds and pence, so that consumers know what to expect from the deal they have signed up to.
31st The deadline for filing self-assessment forms online for 2023-24. Also the deadline for websites to share sales data with HMRC under a new regime designed to pick up people who are trading on platforms such as eBay, Vinted and Airbnb. If you have sold at least 30 items or earned roughly £1,700 in 2024, the platform must give this information to the revenue. You have a £1,000 trading allowance on which you do not need to pay tax, but must declare sales above that. HMRC has an online calculator you can use to find out what, if anything, you will need to pay.
February
1st New rates of duty on alcoholic drinks come into force. Some were announced in the budget and some were announced previously but delayed. Duty on draught products will be cut by 1p, while that on other drinks rises in line with the RPI measure of inflation. Duty on wine will from now on depend on its alcohol content, with higher ABVs (alcohol by volume) attracting more tax.
6th The Bank of England’s first interest rate decision of the year. At the last meeting, in December, the monetary policy committee voted 6-3 to keep the base rate at 4.75%, but economists suggested a quarter-point cut was on the cards for this month.
March
2nd Regulated train fares in England go up by 4.6%, while most railcards will increase in price by £5, or 17%. In London, tube fares also rise by 4.6%. The increase in rail fares will affect about half of those available, and is based on last July’s rate of RPI.
20th The second Bank base rate decision of the year. The rate of inflation will be a big factor in the decision – if it has started to fall, there could be a cut, even if there was also one in February.
26th Not a budget but a “spring forecast” from the chancellor, Rachel Reeves. The statement is not expected to include any tax changes, after she committed to just one fiscal event a year.
Sometime this month: council tax bills for 2024-25 should be finalised and announced.
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April
1st Temporary stamp duty thresholds in England and Northern Ireland come to an end, meaning first-time buyers will have to pay tax on homes worth more than £300,000, down from £425,000, and the threshold will apply if the property costs £500,000 or less, down from £625,000. Movers will start paying the tax on any property over £125,000, down from £250,000. Also on this day, the next energy price cap comes into force, and it could be higher than the last. The forecaster Cornwall Insight has predicted it will rise by 3%, to £1,785 a year.
The cost of a TV licence goes up by 2.9%, or £5, to £174.50 a year. A black and white licence now costs £58.50 a year.
Council tax bills are likely to go up. The government announced that the cap on increases would stay at 5%, so the average bill could go up by about £100 a year. From now, councils can charge up to two times the normal rate on second homes if they choose.
Water bills are also increasing, and households could see an average rise of £86 this year alone.
Travellers will pay more air passenger duty (APD) on some flights from this date. Short-haul flights in economy will attract the same tax as now, while the tax on economy flights to the US will go up by £2 to £90. APD on business class flights to the US will go up from £194 to £216. More increases will come in April 2026, including increases to the tax on private jet travel.
6th The new tax year starts. Labour has maintained the freeze on personal allowances, so more earners will be dragged into the tax net or pay a greater proportion of tax at the higher rate if they have a pay rise coming into effect.
The “national living wage” will go up by 6.7% to £12.21 an hour, while workers aged 18 to 20 will get a 16% pay rise, to £10 an hour.
The state pension will go up by 4.1%, in line with average earnings, as guaranteed by the triple lock. The new state pension will be worth £230.25 a week. Inflation-linked state benefits will rise by 1.7%, after a surprise fall in inflation in September.
