The new tax year often brings a raft of changes that impact people’s pay, investments and savings – and this year is no different. Here we list the big changes affecting people’s finances from next month.

1. Capital Gains Tax breaks cut again…

From April the tax-free allowance for capital gains tax (CGT) will be cut in half, from the current £6,000 down to just £3,000. It means the tax-free amount will be less than a quarter of what it was just over a year ago – and will lead to bigger tax bills for those sitting on gains.

Check out our guide to how to reduce your capital gains tax bill.

2. …but CGT rates cut for higher earners with second properties

From the new tax year the highest rate of capital gains tax will be cut. While the normal rates of capital gains tax are 10% and 20%, there is a higher rate for those who are selling a second property, of 18% for basic-rate taxpayers and 28% for higher-rate taxpayers. But it was announced in the Spring Budget that the top rate of 28% will be cut to 24% from 6 April this year. The lower rate of 18% remains unchanged.

3. Dividend tax-free allowance also cut

The tax-free dividend allowance will be cut in half from £1,000 to £500 from 6 April. The cut will mean that from April an additional rate taxpayer who has more than £1,000 of dividends will pay £197 a year more in tax than this tax year. Moving your money into an ISA or pension is your best way to reduce your dividend tax bill, or you can move assets to your spouse to make use of their tax-free and ISA allowances.

4. Lifetime Allowance is abolished – for real

From April we will be saying goodbye to the pension lifetime allowance, which is currently set at £1,073,100. Instead, two new main allowances will be introduced – the lump sum allowance and the lump sum and death benefit allowance – as well as a third relating to overseas transfers. The lump sum allowance, or the tax-free lump sum limit people can take from their pension, will be set at £268,275, and the lump sum and death benefit allowance will be set at £1,073,100. These are designed to limit the pension tax-free lump sums people can receive during their lives and pass onto beneficiaries when they die.

5. Child BenEfit extends to more families

The rules around child benefit will change from April. The government has made two key changes: first, that the threshold where you start to lose child benefit payments is increasing from £50,000 to £60,000. The second change is that you’ll continue to receive some child benefit up to when you earn £80,000, where previously this cut-off was £60,000. The benefit is based on parents’ individual income – meaning if either of you earns more than the thresholds you’ll lose entitlement to the benefit.

6. Free childcare hours are extended – but be quick to claim

From April the free childcare hours are being extended to two year olds, so they are eligible for 15 free hours a week at nursery or childminders. The big drawback is that the deadline to get the funding is 31 March, and if you miss that you won’t be able to claim until September. To be eligible, both parents need to be working and both need to earn less than £100,000 a year.

7. National Insurance is cut again

The starter rate for National Insurance for employed people, which is charged on the band of earnings between £12,570 and £50,270, will be cut from the current 10% to 8%. But it has already dropped from 12% at the end of last year. Your payroll department should implement the change for you.

Self-employed people got a similar two percentage point cut, with the rate for Class 4 National Insurance cut from 8% to 6% from April – having already been in line for a cut from 9%. At the same time the government previously announced it was abolishing Class 2 contributions, which comes into effect from April this year.

8. National Minimum Wage increasing

The minimum wage will see a meaty increase in April – boosting the pay of the lowest earners in the UK. The minimum wage will rise by more than £1 an hour from April, to £11.44 an hour for those aged 21 and over. It’s a pay rise of £1,856 a year for someone working full time on the minimum wage and will take their annual salary to £20,820 a year (based on a 35-hour week).

9. State pension increases to £11,500 a year

Retirees will receive an inflation-busting 8.5% boost to their state pension from April that will see the ‘new’ state pension increase to £11,502.40 a year. It means for those in receipt of the full new state pension, their weekly income will surge from £203.85 per week to £221.20 per week. Those on the ‘old’ state pension (paid to those who reached state pension age before 6 April 2016) will see their weekly income increase from £156.20 per week to £169.50 per week, amounting to £8,814 a year.

10. Mobile, broadband and TV bills will rise

Lots of people will be surprised by how much their broadband, mobile phone and TV package bills increase by in April. These services typically have price increases baked into the contract that are pegged to the RPI measure of inflation. Because inflation has been high and the increases are RPI plus a bit more, it translates to some pricey increases in bills.

For example, O2 will be charging some mobile phone customers an increase of 8.8%, while Virgin Media customers will also see an 8.8% increase to their TV and broadband packages. You can beat the price hikes by switching provider, or call your existing provider and haggle down your monthly cost.

11. Council tax increases by almost 5%

The majority of councils are increasing their council tax by the maximum amount of 4.99% from April, based on a survey by the County Councils Network. The actual increase you’ll see depends on your local borough and your band. But a 4.99% increase for the average Band D property in the UK would mean it rising to £2,168 from April – a £103 increase. Anyone struggling with their bills should check whether they are eligible for extra support or a reduction in bills.

12. Energy bills drop by 12%

The Energy Price Cap will reduce by 12% from April, making energy bills a bit cheaper for many households. It means the price cap for the average household will drop to £1,690 – a fall of almost £240 a year. While the cut means that a typical bill will fall to the lowest level in two years, energy bills are still way above where they were three years ago when the price cap stood at £1,138.

13. ISA changes are introduced

There are some big changes to ISAs coming in from April, and while savers and investors will see the benefit of them, some are quite technical and fiddly. 

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