April price hikes – how to save money if your costs are going up

Inflation may have fallen to a two-and-a-half year low, but many households will find little to celebrate with a range of prices rising in April and tax changes that could squeeze budgets further.

From council tax to water bills, we round up some of the biggest hikes coming next month and explain what you can do to keep costs down.

Council tax 

In Scotland, council tax is set to be frozen for 2024-25, but elsewhere bills are set to rise.

The average council tax bill in England will go up by 5.1% or £106 from April. Residents in Birmingham and Woking will experience the steepest hikes of 10%, after the local authorities sought special permission from the government to raise rates above the 5% cap for England. 

The average bill in Wales, which doesn't have a cap, will go up by 7.7% or £145, with residents in Pembrokeshire facing an average 12.5% rise on a band D property. 

Northern Ireland uses a different system called rates, but rises are also on the way. The average household rate bill there will be £1,180 in the next financial year.   

• Find out more: council tax calculator – check what your bill will be from April

How to save

Depending on your circumstances, you may be eligible for a discount of 25%. You can claim this if you live alone or with others who are 'disregarded' for council tax purposes, such as full-time students. Other reductions may be available on empty properties, as well as second homes and holiday homes.

You should also consider asking for a review of your council tax band. These are calculated based on the value of your home in 1991 (or 2003 in Wales). If you think the original valuation was wrong, or the property’s size or use has changed, you can appeal for the band to be reassessed (be warned – it could go up).

• Find out more: how to get a council tax reduction

Broadband, mobile and TV 

Broadband and mobile users are again facing substantial price hikes from April 2024. 

BT, EE and Plusnet have already confirmed they will go ahead with price rises of 7.9% for customers this April (December’s CPI figure of 4% plus an arbitrary 3.9%). BT has said that it will end inflation-linked mid-contract price rises and switch to setting out increases in pounds and pence at the outset, as proposed by Ofcom in December 2023 – but not until summer this year. 

Ofcom has said it may eventually ban companies from imposing inflation-linked price rises in the middle of a contract. It claims it will make a final decision in the spring, with the new rules coming into effect four months later.

The annual cost of a TV licence is also going up from £159 a year to £169.50 from 1 April. This fee is required if you watch or record live TV programmes on any channel on a TV, PC, laptop, tablet or phone.

How to save

Try haggling with your current provider.

When we surveyed 4,954 broadband, TV and broadband, and mobile phone customers in January, haggling produced savings of £29, £111 and £70 respectively. 

If you're able to switch, the savings could be even greater. Switching companies generated savings of £98, £154 and £65 – just watch out for an exit fee if you leave mid-contract.

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Energy and water bills

The latest price cap announced at the end of February, covering April to June, means that energy prices are finally going in the right direction. 

Energy bills will fall by 12.3% from 1 April for those on price-capped tariffs, with the new cap confirmed at £1,690. That equates to a saving of around £20 a month for a home using a typical amount of energy

The cost of turning on the tap, however, is set to go up in April 2024, with the annual water and sewerage bills increasing by 6% in England and Wales. That's a rise of £27 to £473, says suppliers' trade body Water UK. In Scotland, water and waste charges will go up by 8.8% – a rise of £36.

How to save

Unfortunately, switching energy suppliers isn't likely to save you much at the moment, so your best bet is to take steps to reduce energy usage yourself. This could include making home improvements, such as draught-proofing windows and doors, or simply turning off lights when not in use. 

Take a look at our collection of guides for more handy tips on cutting energy bills.

To cut water bills, consider installing a water meter. This will allow you to pay for exactly what you’ve used – although you may end up paying more if your usage is on the high side. Use the Consumer Council for Water's calculator to find out how much water you use and get a better idea if a meter is right for your household.

Passport costs

British travellers can expect to pay more for a new passport from 11 April, with fees set to rise by more than 7% next month.

The proposals, which still need to be approved by parliament, will mean the cost of online applications made within the UK for people aged 16 and above will increase from £82.50 to £88.50. Meanwhile, passports for children under 16 will cost £57.50 – up from £53.50, currently. There are similar rises in fees for postal applications and those made from overseas.

How to save

If you are applying for your first passport or your current one is set to expire soon, you might want to consider getting a new one now to avoid paying more after next month. 

Usually, it is advised to renew your British passport about nine months before its expiration. However, it's possible to renew it at any time, irrespective of its expiration date.

For helpful tips and advice on how to cut the costs of flying, take a look at our money saving guides for travellers.

Income tax squeeze

While National Insurance is being cut for the second time this year from April, it doesn't mean we'll all be better off in 2024-25.

The current freeze on income tax thresholds is pushing millions into paying more. The process, called 'fiscal drag', means that if the levels workers start paying income tax from don't rise in line with inflation, more people end up being pulled into higher tax brackets when their wages go up.

By 2028-29, 3.7 million people will start paying the basic rate of 20% on their earnings, according to the Office for Budget Responsibility. Another 2.7 million will be moved to the 40% higher rate and 600,000 will pay the additional rate of 45%.

Higher earners in Scotland also face the prospect of a new 45% 'advanced' income tax rate, applied to earnings between £75,000 and the upper rate threshold of £125,140. The top rate band – for those earning over £125,140 – will also increase by 1p to 48p in the pound in 2024-25.

How to save

Make the most of your £20,000 Isa allowance, as any investments held inside an Isa can grow completely tax-free. 

Switching provider can also get you a better rate, and the process for doing so is about to get easier. From 6 April, savers will be able to open and pay into multiple Isas of the same type, annually. This will replace current rules that only let you put money into one of each type of Isa every tax year.

The change will enable savers to easily move between different providers and is intended to encourage competition.

• Find out more: best cash Isas

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CGT and dividend tax allowances halved

More people will also end up paying capital gains tax (CGT) and dividend tax as the tax-free allowances are about to be halved for the second year running. 

The capital gains tax (CGT) allowance will be slashed from £6,000 to £3,000 in 2024-25. It stood at £12,300 in 2022-23 and hasn’t been this low since 1981-82.

Above the allowance, if you make a gain after selling a property (not your main home), you’ll pay 18% CGT or 24% (cut from 28% in the Spring Budget) on any part of the gain which, when added to your income, exceeds £50,270. Gains from selling other assets are charged at 10% or 20%.

The dividend allowance will also be cut from £1,000 to £500 in April 2024. Hargreaves Lansdown has estimated that 635,000 more people who own shares in a company will have paid dividend tax in 2023-24, and this is now likely to increase.

• Find out more: tax on savings interest and investment income

How to save

If you have a legal partner who hasn’t used up their CGT allowance or is in a lower tax band, you can reduce a CGT bill by transferring assets to them before selling.

Stocks and shares Isas can also help you sidestep paying CGT on your investments. Like cash Isas, these products let you invest up to £20,000 a year without having to pay a penny in CGT – plus, any income such as interest or dividends will also be free from tax.

You also have the option to move existing investments into an Isa by selling them and then buying them back in an Isa – a process that’s known as Bed and Isa. 

Bear in mind that the sale could trigger a CGT bill if the profit takes you above your tax-free allowance, so consider selling before the allowance is slashed from next month. You can also offset losses from the same or a previous tax year to reduce your bill.

• Find out more: best stocks and shares Isas