Connect with us

Published

on

Lower income households are set to be £500 poorer due to benefit cuts and a weak economic outlook, a thinktank has found.

Living standards are on track to fall over the next five years for the poorest half of households, according to the Resolution Foundation’s analysis of Wednesday’s spring statement.

It said a fall of this scale had only been exceeded historically by the early 1990s recession and the 2008 financial crisis and fallout.

Please use Chrome browser for a more accessible video player

How has the economy changed?

Its analysis was released against the backdrop of a backlash against the chancellor, with Labour MPs among those joining charities in warning that her decision to target welfare spending to bolster the public finances was a mistake.

In its latest assessment of the economy that accompanied her speech, the Office for Budget Responsibility declared that real household disposable income per person was expected to grow from next year to 2029-30, led by stronger wage growth as inflation started to fall.

But the country’s independent fiscal watchdog said a global trade war could reduce economic output by 1%, leaving Rachel Reeves’s small headroom – cash set aside that was created by her spending cuts – at risk of being wiped out for a second time.

She was speaking just hours before Donald Trump revealed plans to target all car imports to the US with 25% tariffs.

More on Rachel Reeves

Paul Johnson, director of the Institute for Fiscal Studies think-tank, said: “If you are going to have ‘iron-clad’ fiscal rules then leaving yourself next to no headroom against them leaves you at the mercy of events.”

He warned that Ms Reeves could find herself soon at the centre of renewed tax hike speculation ahead of the autumn budget.

Poorest households worst hit

The overall impact of all tax and benefit changes taking effect in this Parliament will reduce the incomes of the second poorest fifth of households by 1.5%, compared to a 0.6% fall for the richest fifth, the foundation found.

The £4.8bn of welfare savings announced by Rachel Reeves will actually result in £8.1bn in cuts, it said.

“After accounting for the £1.9bn boost to the standard rate of universal credit, and the ‘gain’ from not going ahead with scored-but-never-implemented changes to the Work Capability Assessment, cuts to ill-health, disability and carer’s benefits rise to £8.1bn in 2029/30, and will continue to grow over time,” it calculated.

The changes to benefits mean there are “huge holes” in the welfare safety net, and the foundation called for transitional protections to prevent such sharp income shocks.

Ruth Curtice, the chief executive of the Resolution Foundation, said: “High debt servicing costs, weak tax receipts, and the need to reassure jittery markets meant the chancellor had to announce tax rises or spending cuts in her spring statement.

“She chose to focus the bulk of her consolidation on welfare cuts. These cuts have been justified on the basis of getting people into work, but it is questionable how much of a jobs boost they’ll deliver.

Please use Chrome browser for a more accessible video player

‘I’ll struggle if I lose disability support’

Read more:
Are you better or worse off after the spring statement?
OBR slashes UK growth forecast for 2025

“After all, the bulk of the cuts are to disability benefits which aren’t related to work, and the cuts take effect from 2026, three years before the government’s employment support programme kicks into gear.

“While the OBR’s [Office for Budget Responsibility] outlook for growth today got gloomier, it is far more optimistic about Britain’s medium-term economic prospects.

“The chancellor will hope that reality catches up with the OBR, rather than the OBR falling back to reality, otherwise more tough choices await.”

Ms Curtice added: “The outlook for living standards remains bleak. Britain’s poor economic performance, combined with policies that bear down hardest on those on modest incomes, mean that 10 million working-age households across the bottom half of the income distribution are on track to get £500 a year poorer over the course of the Parliament.”

Continue Reading

Business

Every household bill rising in April – and how you can beat the hikes

Published

on

By

Every household bill rising in April - and how you can beat the hikes

Many household bills are rising from today – ranging from energy prices and council tax to mobile phone contracts and broadband.

Coinciding with the new financial year, from today there will be higher bills for:

  • Energy
  • Broadband, mobile phone and TV licence
  • Car tax
  • Water
  • Stealth taxes
  • Stamp duty
  • Council tax

The Sky News Money blog outlined the hikes – and how you could potentially beat them – in one of its long read features below.

You can read more from the Money blog as well as reactions to today’s increased bills here.

Cost of living calculator: See how much your bills are going up

ENERGY BILLS

The average annual energy bill will rise to £1,849 as industry regulator Ofgem increases the price cap for the third time in a row.

More from Money

The new figure represents a 6.4% a year – or £9.25 per month – increase in the typical sum the vast majority of households face paying for gas and electricity when using direct debit.

You can read more about the changes and why they’re happening here.

Only those on fixed-rate deals – around 11 million homes – will see no change until their current term expires. An extra four million homes have fixed the cost of energy units since November, Ofgem said.

Standing charges – daily fixed fees to connect to a gas and electricity supply which vary by region – are also rising for gas while dropping for electricity, but it depends on where you live.

So should you fix?

Consumer expert Martin Lewis says that, based on where energy prices are currently at: “If you find a fix for up to 3% more than the current (January to March) or 3% less than the new (April to June) price cap, it’s predicted you’ll save over the year compared with staying on the price cap.”

The best deal currently on the market is with Outfox the Market, which is offering a 12-month fix for 7.4% less than January’s cap and 12.9% less than April’s.

EDF is currently offering a no-exit fee fix, and Octopus is doing the same for existing customers – so if the maths work for you, these could be risk-free options.

We spoke to Emily Seymour, Which? energy editor, about switching.

“There’s no ‘one size fits all’ approach when it comes to fixing an energy deal as it will all depend on your individual circumstances,” said Seymour.

“For example, if you have an electric vehicle, you might want to look for a tariff which offers cheaper electricity overnight to charge your car.

“As a rule of thumb, we’d recommend looking for deals close to the current price cap, not longer than 12 months and without significant exit fees.”

Other help

The warm home discount provides a £150 annual reduction on energy bills.

Those wanting to receive the payment must be getting the guarantee credit element of pension credit or be on a low income with high energy costs.

The government advises: “If you’re eligible, your electricity supplier will apply the discount to your bill. The money is not paid to you.

“You’ll usually get the discount automatically if you’re eligible. You only need to apply if you’re on a low income in Scotland – contact your energy supplier to apply.”

Those on pension credit will also be eligible for the winter fuel allowance later this year – this is worth up to £150.

BROADBAND AND MOBILE

While Ofcom’s new rules banning inflation-linked contracts came into effect in January, many consumers will be on older contracts that will still see a price rise linked to inflation.

This is causing confusion among customers, so for overall clarity: Uswitch says this April’s rises are expected to add an average of £21.99 annually for those on inflation-linked contracts and up to £42 a year for those on newer “pounds and pence” plans that are subject to fixed increases.

How do you know which contract you have?

Many providers started putting customers on fixed increase contracts in 2024 – so if you started a new broadband contract recently, you may be subject to a pounds and pence price hike.

These are the dates the providers started introducing them…

  • BT/EE/Plusnet: Contract started on or after 10 April 2024
  • Vodafone: Contract started on or after 2 July 2024
  • TalkTalk: Contract started on or after 12 August 2024
  • Three Broadband: Contract started on or after 1 September 2024
  • Virgin Media: Contract started on or after 9 January 2025

So if you signed up for a deal on any of the above after those dates, you should be on a fixed annual increase – but you’ll want to check your individual policy.

Here’s an overview of the hikes being implemented by major providers…

Consider switching

You might be able to avoid the rises by switching provider as cheaper deals are often available to new customers.

You should check to see if you’re out of contract first, or what the exit penalty may be.

Research by Which? shows switching providers when you’re out of contract could cut bills by up to £235 annually.

If you don’t want to leave your provider, you could also call them and try to haggle down your monthly cost.

Several broadband providers have social tariffs available, helping those on benefits access an internet connection at a lower monthly price.

According to Uswitch, two-thirds of financially vulnerable households are unaware that low-income broadband tariffs exist.

Bundling?

You may be able to get cheaper prices by bundling your phone, internet and TV services – though you need to read the small print as exit fees can be significant.

TV LICENCE

The cost of a TV licence will also go up by £5 to £174.50

The rise comes after a £10.50 rise brought the charge to £169.50 in April last year.

If you’re 75 or over and you get pension credit, or you live with a partner who does, you qualify for a free TV licence.

You can apply for it here or by calling TV Licensing on 0300 790 6071.

Those in residential care or sheltered accommodation can get a licence for £7.50, while those registered blind or living with someone who is can get a 50% discount.

TRAIN FARES

Train fares in England have increased by 4.6% as of 2 March. Railcards are also going to become more expensive, despite the record-low reliability of services.

The Welsh government matched Westminster’s cap, while Transport for Wales is applying various increases to its unregulated fares.

Meanwhile, the Scottish government will increase all ScotRail fares by 3.8% from today.

One of the best ways to beat the price hikes is by getting a railcard – and they’re not just for traditional concession groups. We outlined all the different railcards here…

How can I use a railcard to save money on my train fare?

How to beat the system

Mark Smith, who set up The Man in Seat 61 blog to help people travel cheaper and better, told Money there were various “traps” people fell into.

Tickets are normally released around 12 weeks in advance, but initially you may only see more expensive Off-Peak and Anytime tickets.

There’s often a gap of a week or two before reservations open and the much cheaper Advance fares go on sale.

Smith says you can save money by purchasing any time before your day of travel – a £30 or £40 Advance fare will then turn into an £68.60 Off-Peak one-way or a £184.70 Anytime, for example.

If you are forced to travel at peak times you should consider split ticketing. For example:

If you’re travelling at 5pm on a Monday, instead of getting a peak ticket all the way from London to Manchester, get a peak Anytime ticket to Milton Keynes and then an Off-Peak from Milton Keynes to Manchester.

Read more about split ticketing here

One final trap to avoid was exposed by a Which? investigation last year that found train station ticket machines could be much, much more expensive than buying online.

CAR TAX

Also going up is the standard rate of road tax for cars registered after April 2017.

The flat rate cost of car tax from April 2025 is £195 (so an increase of £5).

Hybrid cars get a small discount (£10) but if your vehicle had a list price of more than £40,000 when it was first sold then you may also be liable for the “luxury car tax” fee, which adds £410 to your annual costs.

You may pay less if your car was first used before 2017 – the exact amount will depend on the year a car was registered and the type of fuel it consumes.

Perhaps a bigger change is that electric vehicles (EVs) will also no longer be exempt from tax – those registered from April 2025 will pay the lowest rate of £10 in the first year, then move to the standard rate.

Feeling confused? Autotrader gives this example…

It’s April 2025 and you’re choosing between Porsche Macans, petrol or electric (lucky you). A basic petrol Macan will mean you pay £4,680 in car tax in the first year, whereas with the electric one, you’ll pay £10. After that, they’ll both go to the standard rate (£195 per year) plus the £410 Expensive Car Supplement for five years.

Vehicle tax reminder. Pic: iStock
Image:
Vehicle tax reminder. Pic: iStock

WATER

Possibly the most controversial of the April changes is the sizeable increase to water bills.

Bills are going up in a development that has been blamed on problems including higher borrowing costs on large levels of debt, creaking infrastructure and record sewage outflows into waterways.

However, it was reported last March that England’s private water firms made £1.7bn in pre-tax profits – up 82% since 2018-19 – prompting renewed calls for the utility to be renationalised.

The average annual water bill will rise by 26% or £123 in the next financial year alone, figures showed.

Water UK said the increases across households would also vary, depending on circumstances such as water use and whether a water meter was installed.

Get the full story here…

Water bills in England and Wales to rise by average of £10 per month

All water companies offer a social tariff for eligible customers that reduces the cost of water bills – check with your provider to see if you are eligible.

Should you get a water meter?

Martin Lewis has some simple advice on this one: if you have more bedrooms than people in the house, a water meter is likely to save you money.

If your water company says it can’t give you a meter, you can asked for an “assessed charge” – which can offer the best of both worlds. Ofwat explains yours rights here.

STAMP DUTY

Changes come into force from today and affect those in England and Northern Ireland.

The current “nil rate” band (at which you start paying) for first-time buyers will reduce from £425,000 to £300,000, while other home-buyers will also see a reduction from £250,000 to £125,000.

In London, an average first-time buyer could end up paying more than £11,000 extra from April, Santander said.

You can read more about Stamp Duty rules here

COUNCIL TAX

Some 85% of top-tier council authorities in England are set to increase council tax by just under 5%.

Additionally, Bradford, Newham, Birmingham, Somerset, and Windsor and Maidenhead have been given special permission by the government to bypass the 4.99% cap – meaning they could raise council tax by more.

Read more:
The town bracing for UK’s biggest council tax rise of almost 16%

Our data and forensics unit has been taking a look at how council finances have deteriorated here.

With the majority of councils increasing their council tax by the maximum amount this month, some households could see their bills jump significantly.

Are you eligible for a discount?

You may qualify for extra support or a reduction in your council tax bill, for example if you’re on a low income, a student, living alone or are disabled.

Another option is to have your council tax bill spread over 12 months instead of the usual 10 – this won’t save you money but could help you to budget, if your council offers this option.

You could also get your home’s council tax band reviewed, which may entitle you to a refund if you’re in the wrong band. However, you should be aware the review could lead to your property being put in a higher band.

STEALTH TAX

Expecting a pay rise?

You may be surprised to see how little translates to your pay cheque.

That’s because frozen income tax thresholds could mean that some people get pushed into higher tax brackets as their wage goes up.

Others could be pushed into paying tax on their savings by breaching the personal savings allowance – which is £1,000 tax-free interest for basic rate taxpayers.

WHAT TO DO IF YOU’RE STRUGGLING TO PAY BILLS

If you’re having trouble paying your bills, there’s lots of support out there.

Emily Seymour, from Which?, told Money: “If you’re struggling to afford any household bills such as energy, council tax, water and telecoms, the first step is always to speak to your provider and see what help is available.

“It’s important to remember that energy companies are obliged to help you if you tell them you are struggling to pay and will not disconnect you if you miss a bill payment. You could ask for a review of your payments, a reduction in your payments or a payment break, more time to pay, and access to hardship funds.

“For water and broadband, there are cheaper social tariffs available so it’s worth speaking to your provider to see if you qualify.

“If you don’t qualify for a broadband or mobile social tariff, our research shows you could still make big savings by switching providers – especially if you’re with a firm that hikes prices annually – so it’s always a good idea to compare deals at the end of your contract to find the best offer for you.”

You can check your eligibility for benefits on the government website which may allow you to access lower tariffs and contact your local council to see if you’re able to get support with water and energy bills.

There’s also charities offering help, including Citizens Advice and National Debtline, which are on hand to provide free, impartial advice.

Continue Reading

Business

Elon Musk’s dad says Tesla protesters are ‘bums’

Published

on

By

Elon Musk's dad says Tesla protesters are 'bums'

Elon Musk’s father has told Sky News that protesters targeting his son’s cost-cutting work for the US government are “bums”.

Errol Musk was responding, in an interview with Business Live, to a growing backlash among US taxpayers and Tesla customers against his son’s role in the Trump administration-created Department of Government Efficiency (DOGE).

The electric car firm has increasingly become the subject of sales boycotts and protests – neither of which have been consigned to the US though dealerships there have seen vehicles vandalised and even set alight.

Money latest: Major car tax change on Tuesday – here’s what you need to know

Please use Chrome browser for a more accessible video player

‘Elon Musk has got to go’

Musk Sr told presenter Darren McCaffrey: “To take notice of the bums that are trying to hurt Tesla by damaging cars, well that’s just plain silly. Nobody does that, you know, you use your brain… and (it) tells you these people are the problem, not the car.”

The anger directed at Elon Musk was “media hype”, he said as he also dismissed growing unease among Tesla investors that his son’s main business interest was suffering at a time when the challenges facing it are only rising.

Earlier this month one of Tesla’s earliest investors, Ross Gerber, told Sky News Mr Musk should step down as the electric carmaker’s chief executive unless he quit his work for the Trump administration.

More on Elon Musk

Please use Chrome browser for a more accessible video player

‘I think Tesla needs a new CEO’

His worries included bad publicity and Mr Musk’s ability to devote enough time to Tesla.

It was revealed last week that Tesla sales had fallen 40% in Europe and were behind those of cheaper Chinese rival BYD on an annual basis.

Mr Musk himself has since warned he expects a “significant” hit to Tesla from Mr Trump’s metal tariffs and looming duties on all US car imports and car parts.

He also hinted at the weekend, in an interview with Fox News, that he could soon have more time on his hands as the bulk of his work at DOGE should be completed by late May.

Errol Musk denied any suggestion that his son was overstretched, saying there were good people at Tesla to delegate day-to-day business while Elon completed “vital work” for US taxpayers, given the state of the country’s mounting debt pile.

“He’s got plenty of ability to do that. Don’t worry about it,” he said, while predicting that Tesla shares would recover to $600 per share by the year’s end. They are currently changing hands for $254.

“There’s no concern there whatsoever, not at all,” he said.

Continue Reading

Business

Post Office interim boss Brocklehurst lined up for permanent role

Published

on

By

Post Office interim boss Brocklehurst lined up for permanent role

The acting chief executive of the Post Office is being lined up to take the job on a permanent basis as the state-owned company continues talks with ministers over its long-term funding arrangements.

Sky News has learnt that Neil Brocklehurst, who was named interim chief last September, is close to being handed the role.

Whitehall sources said on Monday that an announcement about Mr Brocklehurst’s appointment was likely to be made in April.

Money latest: Major car tax change on Tuesday – here’s what you need to know

The decision, which requires the approval of business secretary Jonathan Reynolds, will bring a degree of stability to an organisation still grappling with the financial and reputational consequences of the Horizon IT scandal, which saw hundreds of sub-postmasters wrongly convicted of fraud and false accounting.

Reliant on the government for its funding, the Post Office has been in negotiations with ministers about delivering a previously pledged pay uplift this year.

Earlier this month, Sky News reported that Nigel Railton, the company’s chairman, had informed thousands of Post Office managers that he had yet to gain certainty from Whitehall about a £120m increase for this year.

More from Money

The sum was promised in November as part of a strategy to rebuild the Post Office in the wake of the Horizon scandal.

The Post Office has outlined plans for an ambitious transformation which includes franchising more than 100 directly managed branches.

Nick Read, chief executive of Post Office Ltd, arrives to give evidence to the Post Office Horizon IT inquiry at Aldwych House, central London. Picture date: Wednesday October 9, 2024.
Image:
It was announced last year that Nick Read would leave the Post Office in March

A substantial number of jobs are also being cut at the company’s head office as part of the restructuring.

Several tranches of those have already taken place.

Mr Brocklehurst replaced Nick Read at the Post Office’s helm following a turbulent period for the outgoing boss.

Mr Read was repeatedly accused of being obsessed with his pay arrangements and being at the centre of a series of rows with both board colleagues and his government employers.

Like Mr Railton, Mr Brocklehurst is a former executive at Camelot, the previous National Lottery operator.

A Post Office spokesman declined to comment, while the Department for Business and Trade has been contacted for comment.

Continue Reading

Trending