What 2017 could mean for you and your finances
Published 12 January 2017 by Emily Bancroft
Will the New Year mean more money in your pocket?
A New Year can often mean new promises to yourself. You might make a resolution to get more active or maybe you want to stop watching so much TV. But for 2017, why not make this the year that you get in control of your finances.
If you’ve not already got a household budget in place, it’s worth doing one now. This will help you keep track of everything you’ve got coming in and going out of your account. And there are also some changes to laws and benefits that might affect your money for 2017 – let’s take a look at what these are and what they could mean for you.
Minimum wages increase
From April 2017, the National Living Wage will increase from £7.20 to £7.50 an hour. The National Living Wage is for all working people aged 25 and over. If you’re under 25, you’ll get the National Minimum Wage – this went up to £6.95 an hour in October 2016. Not sure of the difference between the two wages? Read our blog on the National Living Wage and the National Minimum Wage.
If you’re over 25 and you’re on a low income, this could mean more money in your pocket every month, giving you more spending power and making bills more affordable.
Insurance Premium Tax increase
Insurance Premium Tax (IPT) will increase by 2% from June 2017, putting it at 12%. IPT is a tax on general insurance premiums, including buildings, contents and car insurance policies. Insurers usually include this in the price of premiums so you don’t even notice it – similar to VAT when you buy goods in shops.
A 2% increase might not seem like a lot but IPT has increased several times in recent years. It was just 6% in October 2015, so it’s doubled in less than two years. This change could mean that you’ll start paying a bit more for some of your insurance premiums from June. If you’re only just managing your bills, this increase could stretch your finances.
Universal Credit taper rate
The Universal Credit taper rate will fall from 65p to 63p from April 2017. This is the amount you lose from your benefits when you start to earn over a certain amount. The change will mean you’ll get to keep slightly more of your benefits as well as earning money from work – so you might be able to afford to take on some more hours.
Child Tax Credit cuts
Changes to Child Tax Credits will finally come into force in April 2017. Under the new rules, you’ll only be able to claim Child Tax Credits for your first two children. So if you have a third child, you can’t claim any Child Tax Credits for them.
Keep in mind though, this only applies to new claims or changes to your existing claim. If you’re already claiming Child Tax Credits for three or more children, this new rule won’t affect you.
More free childcare hours
Throughout this year, the Government will roll out its scheme to give parents 30 hours of free childcare a week. This is gradually going live in different areas across England – check on your local council’s website to find out when it start for you.
To benefit, your child must be aged three or four when the scheme starts in your area. You also need to work more than 16 hours a week and earn less than £100,000 a year to qualify. There’s some concern that not all nurseries will be able to afford to offer this and they might ask parents to make some ‘contributions’.