As 2019 swings into action, the UK’s financial situation is a growing concern. In light of 2019’s new budget and the uncertainty surrounding Brexit, a number of day-to-day financial matters are changing. As a result, this is causing unrest both within financial industries and for families across the UK.
Energy Price Cap
Perhaps the biggest change to affect every family in the UK is that of the new Energy Price Cap. Ofgem, the government’s regulator for gas and electricity markets, introduced a new limit for dual fuel bills of £1,137. For families on stricter budgets, particularly those turning to online loans in the face of rising bills, this could come as a relief.
However, for those who have good deals from their supplier, this could cause more harm than it solves. Due to this cap, companies are likely to try to cover the lost money by eliminating some of the better value packages or discounts they currently offer, meaning that those currently benefiting from these could see their bills rise.
Pension Changes (contributions, state pension etc)
Pensions are also facing changes in 2019, with both the required contributions and the state pensions set to rise. For those still of working age, the 6th April this year will see the pension contributions rise from 3% of pay to 5%. As a result, paycheques are likely to shrink this year.
For those already on their pensions or close to the required age, however, the amount available from the government will rise by 2.6%. In short, the basic state pension will reach £129.20, and the flat-rate pension will reach £168.20.
Rail Fares (+ Railcard)
The public transport industry has also seen changes this month, with rail fares increasing by 3.1% on January 2nd. For commuters utilising the country’s rail services, season tickets, off-peak returns and walk-up anytime fares are the most widely affected.
However, January 2nd also saw the introduction of a new discount option: the 26-30 Railcard. As with the 16-25 railcard, this will offer a third off of singles, returns, advance tickets and Oyster fares. This won’t be valid on peak fares below £12, or on season tickets, so regular travellers won’t benefit from this new addition.
While the changes to inheritance tax won’t affect everyone, the nil rate band will be increasing in April 2019. The nil rate band refers to the amount of money an estate must be worth before inheritance tax can be charged.
The tax-free amount currently sits at £325,000 and while this isn’t set to change, the additional £125,000 available when a home is passed on to a direct descendant will rise to £150,000. For homeowners looking to pass on their property to a spouse or relative after their death, this is a radical change worth investigating before April rolls around.
With a number of financial changes already underway and others on the near horizon, the New Year is already shifting the way money is managed. With further changes to ‘Help To Buy’ ISAs, crackdowns on Buy-to-Let tax relief and adjustments to tax-free personal allowances, there is plenty to watch in 2019.