Cost of living: Everything that will cost you more in April

Soaring energy bills are not the only costs that will add pressure to already squeezed households as hikes in council tax, broadband prices, mobile phone tariffs and water and sewage bills are set to add an extra cost burden of £73 a month to UK consumers.

The rise in the energy price cap is set to add an extra £58 a month (£693 a year) to the average energy bill from the start of the month. But consumers will also feel the squeeze as council tax, broadband prices, mobile phone tariffs, water and sewage bills are also set to rise in April.

Interactive Investor estimates that combined, these costs will add an extra £73 per month cost burden to consumers, on average, without taking into consideration increases in the price of fuel and groceries.

Here are some changes which could impact your wallets from next April.

Energy bills

Millions of UK households will see their bills go up by around £700 a year following a price rise this week.

From 1 April, about 18 million households on standard tariffs will see an average increase of £693 – from £1,277 to £1,971 per year.

Some 4.5 million prepayment customers will see an average increase of £708 – from £1,309 to £2,017.

Energy firms will be able to increase bills by 54% when the new cap is introduced on Friday 1 April.

Read more: UK facing worst cost of living crisis in 60 years

The price cap is reviewed every six months, and prices are expected to rise yet again in October, with some estimates saying it could reach £3,000.

Going to the pub or eating out

The cost of buying a pub meal, soft drink or hotel stay could become more expensive from April as VAT levels across the hospitality sector lift back to 20%.

Marston’s, which operates more than 1,500 pubs, said it would increase the price of pints by up to 45 pence.

The industry saw VAT dropped to 5% to support its recovery during the pandemic.

Wetherspoon hiked the price of a by 10 pence outside of London, and 20 pence in the capital earlier this month to cope with inflation.

National Insurance

On April 6, the Government’s proposed National Insurance tax rise will come into force.

It will see employees, employers and the self-employed all pay 1.25 pence more in the pound for NI.

For employees they would previously pay 12% on earnings up to £50,270 and 2% on anything above that. From April 6, the rate goes up to 13.25% and 3.25% respectively.

For the self-employed, rates will go up from 9% and 2% to 10.25% and 3.25%.

Payments will only be collected on wages above £9,880, although this rises to £12,570 in July – a threshold rise announced by chancellor Rishi Sunak at the recent Spring Statement.

Read more: UK consumers could pay 40% more for fruit and vegetables as supply costs bite

Supermarket bills

Annual food bills are set to rise by £180 on average as the cost of living squeeze continues to hit household budgets, according to consultants Kantar.

Grocery prices rose 3.8% over the four weeks to 23 January compared with the same period last year, according to the market research firm. Prices are rising fastest for fresh beef and poultry, savoury snacks, crisps, skincare and cat food but are falling for fresh bacon, vitamins and beer.

Fraser McKevitt, Kantar’s head of retail and consumer insight, said: “Prices are rising on many fronts, and the weekly shop is no exception. Taken over the course of a 12-month period, this 3.8% rise in prices could add an extra £180 to the average household’s annual grocery bill.

Retailers are also adapting, moving away from “round-pound” prices. The percentage of packs sold at either £1, £2 or £3 fell from 18.2% last year to 15.9% this March.

Read more: UK cost of living crisis to last two years, says Bank of England’s Bailey

Mobile and internet bills

Major telecoms companies including BT, Sky and Virgin are all upping the price of their mobile and broadband deals from April.

BT is increasing prices for almost all its customers, including BT Broadband, landline, BT Mobile, BT Sport and BT TV.

Once it comes into play this Friday, it means up to a 9.3% increase on customer's bills each month.

BT has said the average price increase will be £3.50 a month – or £42 a year.

Sky customers will pay an extra £43 a year as the company hikes its broadband and TV bills from April.

Council tax

The average annual band D council tax set by local authorities in England will rise to £1,966 from Friday, an increase of £67, according to the Department for Levelling Up, Housing and Communities.

This band is typically used for comparisons as it is in the middle of the range, with band A properties having the lowest value and band H being the highest in England.

The average Band A bill will rise to £1,310, Band B to £1,529 and Band C to £1,747 a year.

Homes in Bands A-D are in line to receive a £150 council tax rebate, announced by chancellor Rishi Sunak, to offset the cost of rising energy bills. This should be paid automatically in April.

Councils were given the green light to hike rates by up to 3% without having to hold a referendum and on top, can add an additional 2% which is ring fenced for adult social care.

Read more: UK energy bills: Why you should pay by direct debit

Water bills

Industry body Water UK has revealed that the average yearly bill in England and Wales will go up from £412 to £419 – an increase of £7. Though not everyone will see a rise. Some postcodes in England and Wales will see a drop in their annual bill of £31 per year, while others will see a big hike of £35 per year.

Different areas of the country have a water company assigned to them.

All water companies are able to increase bills in line with inflation. As a result, some bills are going up significantly due to rising inflation rates.

However, some water companies have also been allowed to charge their customers more.

Of the 11 water and sewerage companies in England and Wales, customers of Northumbrian Water (10.8%) and Severn Trent (7.1%) have seen the highest average bill rises.

Income tax

Income tax rates and thresholds are unchanged from 2021/22. So if your salary doesn’t change, your income tax payments will remain the same – although the purchasing power of your disposable income is falling, thanks to inflation, according to Adrian Lowery, personal finance expert at investing platform Bestinvest.

However, if you receive a pay rise – whether it’s below, in line with or above inflation – you will pay more tax. And your marginal tax rate will increase if that pay rise takes you from one tax band to the next.

So if a pay rise takes you from below £12,570 to above then you will go from paying zero income tax to paying 20% on the amount above £12,570. Likewise if you shift from a salary of below £50,270 to above then you will start to pay tax at the higher rate of 40% on the amount above that figure. The next threshold is at £150,000, where the additional tax rate of 45% kicks in.

But workers who receive a pay rise that takes them above £100,000 will notice a big chunk taken from their monthly pay rise, because the personal allowance starts to be withdrawn at this mark, and the effective marginal tax rate works out at a hefty 60%.

First and second class stamps

Royal Mail (RMG.L) is hiking stamp prices for both first and second class options in yet another blow to UK households feeling the cost of living squeeze.

From 4 April, the price of a 1st class stamp will increase by 10p to 95p and the price of a 2nd class stamp will increase by 2p to 68p.

Air passenger duty

Travelers should prepare to pay more as the Air Passenger Duty increase will see the price of some international flights go up.

Under the changes, long haul flights are to become more expensive while the tax paid on domestic flights will be cut in half – but not until April 2023.

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