Money Matters: How much benefits, pension and minimum wage are rising
In this week’s Money Matters column, Wrekin’s Debt and Energy manager Dan Bebbington sets out the changes to benefits, state pension and minimum wage rates coming into effect this month – and what they mean for your income.
The start of a new financial year is upon us, bringing with it the annual increase in minimum wage and an uplift in benefits and pension.
Other statutory payments for new parents and those temporarily signed off work are also going up.
While this could mean a boost to your monthly income, the exact amounts will depend on how much you work, your age and what help you are entitled to based on your personal circumstances.
It’s also important to remember that council tax and other expenses such as childcare also normally go up in April. You’ll need to factor these in before working out a new monthly budget.
Let’s start with minimum wage. The rules are changing so the current rate for over-23s will instead apply to everyone over 21.
The hourly minimum wage for this category is rising from £10.42 to £11.44 – meaning a potential pre-tax increase of around £160 a month for someone working 37 hours a week.
The rate for 18- to 20-year-olds is rising from £7.49 to £8.60, and for under-18s and apprentices it’s going up from £5.28 to £6.40.
Meanwhile benefits are going up by 6.7%. For those claiming Universal Credit, the standard monthly allowance is rising from £292.11 to £311.68 for single claimants under 25 and from £368.74 to £393.45 for those over 25.
For couples, the monthly amounts are going up from £458.51 to £489.23 (under-25s) and £578.82 to £617.60 (over-25).
The amounts per child (capped at two children if born after 2017) is also rising, as are the carer element, disabled child element and the amount you get if you’re deemed to have ‘limited capability for work’.
The childcare costs cap is rising to £1,014.63 a month for one child, or £1,739.37 for two or more.
The work allowance (the amount you’re allowed to earn before you start losing benefits) is also going up. The amount depends on whether you also get help with rent.
Legacy benefits such as tax credits will increase by the same percentages, as will non-means tested disability benefits such as Personal Independence Payments (PIP) and Disability Living Allowance (DLA).
Turning to pension – the state pension rates are going up by 8.5%.
It means the weekly amount for those on the new state pension will go up from £203.85 a week to £221.20.
For those on the old state pension, who reached retirement age before April 2016, the weekly amount is rising from £156.20 to £169.50.
Parents on maternity, paternity, adoption or shared parental leave will see their weekly entitlement rise from £172.48 to £184.03. Remember, these are the statutory amounts but you could get more than this depending on your workplace’s individual policy.
Child benefit is going up from £24 to £25.60 a week for the first child, and from £15.90 to £16.95 a week for subsequent children.
Finally, statutory sick pay is rising from £109.40 to £116.75 a week.
If you need help understanding your benefits, making a claim or lodging an appeal, you can contact Citizens Advice. Wrekin Housing Group customers can also contact our Money Matters team.
3rd April 2024