It’s a new financial year, but what does that mean for me? 

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April money monthly – How might the Spring Budget affect me?
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April is an important month when it comes to your finances. That’s because:

  • April 1st marks the beginning of the UK government’s financial year
  • April 6th is the start of a new tax year

But what’s the difference and what do they mean for me?

If you heard the government’s new budget announced in March, well, it applies to the UK government’s financial year. That means all the changes announced to financial policies, such as the new National Minimum Wage, came into effect on April 1st and will apply until March 31st next year, when a new UK budget will take over.

Meanwhile, the tax year relates to how much personal tax you can save and how much you need to pay based on your income from April 6th to April 5th the following year. You might think, ‘why not calculate it based on the calendar year?’, but unfortunately, that’s just not how it’s done in the UK. All the rules regarding personal tax set out in the UK government’s budget come into effect on the 6th of April, including changes to National Insurance contributions.

So, both dates might have an impact on your finances, and it’s important to know what changes have happened so you make the most of any beneficial impacts and plan for impacts that decrease your income.

Three top tips

Read the key summary points from the UK government’s budget

Familiarise yourself with what changes might affect you. Search ‘UK spring budget summary’ in your favourite internet browser and use the ‘News’ tab to see a list of articles by major news providers that summarise the key points that are relevant to a good size of the population.

Check your April payslip

Have changes to National Minimum Wage and National Insurance contributions been implemented? Are you on the right tax code? Does your workplace pension pot match the contributions on your payslips?

If you earn minimum wage, check that your pay has increased to the new National Minimum Wage.

Also confirm that your National Insurance contributions have decreased 2%, which was a big headline for this year’s Spring budget.

So, if you’re 18 and work 35hrs a week on minimum wage, you should receive £113 more pay each month, and if you’re 21, you should receive £136 more each month. See tables below for how these figures were worked out.

Monthly (Age 18) 2023/24 2024/25
Gross pay (NMW x 35hrs) £1,136 £1,304
Income tax (20%) £0 £30
National Insurance contribution (10%) £10 £21
Pension contribution (8%) £91 £104
Net pay £1,036 £1,149
Monthly (Age 21) 2023/24 2024/25
Gross pay (NMW x 35hrs) £1,544 £1,735
Income tax (20%) £75 £110
National Insurance contribution (10%) £50 £55
Pension contribution (8%) £124 £139
Net pay £1,296 £1,432

Note:

  • Income tax = (Gross pay your Personal Tax Allowance £12,570 Pension contributions 8%) × 20%
  • NI contribution = (Gross pay your Personal Tax Allowance £12,570) × 10%
  • Pension contributions = Gross pay × 8%

While you’re checking your payslip, take the time to make sure you’re on the correct tax code, particularly if you’ve changed jobs in the past year. Otherwise, you might be paying too much and be due a refund.

Finally, use this opportunity as an annual reminder to login into your workplace pension and check that the contributions on your payslip match the amount that’s been deposited. Mistakes happen, so it’s worth checking from time to time.

Review your budget

The government reviews their budget each Spring and it's also an excellent time to review your budget or create one if you haven't already.

It might be helpful to take a look at our article on ‘How do I make a basic budget for myself?’  

Budgeting is a fundamental aspect of financial management, helping you track your income and expenses, prioritise your spending, and save for your goals.

Take stock of your financial situation, including your income sources, regular expenses, and any outstanding debts. Use this information to create a budget that aligns with your financial goals and helps you manage your money effectively throughout the year.

Summary

Keep these key dates in mind and use them as an annual reminder to familiarise yourself with the UK government’s budget, to check your payslip and to review your own personal budget.

Stay proactive at checking you’re receiving all the benefits of the budget you’re entitled to and remember every small action you take towards improving your financial situation can make a meaningful difference in the long run.

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