Financial changes 2023. 2022 has been a year that has felt relentless for so many. With inflation, energy price rises, war and a dead queen, a lot of people are feeling really rather bruised and scared about why lies ahead. The constant doom and gloom in the financial forecasts can feel oppressive and scary. However, some changes have been made with his in mind. Whilst some rises are inevitable, there are allowances made in caps of bus fairs, TV licenses being frozen and prescription fees. However, brace yourself. With the help of Hargreves Landsdown, here are 25 changes and dates to note for 2023.
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January: A £2 cap on single bus journeys
The £2 cap on single bus journeys comes into effect across England until the end of March, saving people 30% on the average fare. This not only helps people save on bus travel but encourages people to leave their cars at home easing congestion on the roads.
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31 January: Non barcoded stamps deadline
Be sure to rummage through your wallet and drawers and gather up any non-barcoded stamps because after this date they cease to be valid for postage. Any non-barcoded stamps can be returned to Royal Mail who will swap them for updated versions.
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31 January: Tax return deadline
In the last week of January 2022, 1.5 million people still hadn’t filed their tax return, while 66,500 very early busy bees filed their returns on the first day of the tax year. If you’ve been forgetting the stress of everyday life for a week or so, the early days of January are an ideal time to get on with the serious business of filing tax returns. It will mean you won’t have that nagging feeling gnawing away for the rest of the month. It also gives us the chance to get organised, get things right and the time to sift through the mountains of paperwork needed to file on time.
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Early 2023: Review of State Pension Age published
There’s no definite date on this yet, but this report will be eagerly anticipated. State pension age is currently 66 and is due to rise to 67 by 2028. Under current plans it is due to hit 68 by 2046 though the government has stated its intention to accelerate this to 2039. Rumours suggest government wants to speed up the shift even more with a move to 68 potentially happening as early as 2032. However, with increases in longevity slowing and many people simply not able to keep working that long government will face fierce opposition if they are seen to be moving forward too quickly.
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1 March: Rail fares rise
Normally government uses July’s Retail Prices Index (RPI) measure of inflation to determine the increase in fares such as season tickets on most commuter journeys, some off-peak return tickets on long distance journeys, and Anytime tickets around major cities. However, it was announced in August that this year’s rail fare is increasing below the inflation rate to help people with the cost of living.
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15 March: OBR forecast to be prepared by today.
The Office for Budget Responsibility has been asked to prepare a forecast by this date to accompany the Spring Budget which could be held on this date or shortly afterwards.
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31 March: Final deadline to exchange for Help to Buy
All Help to Buy Eligible Dwellings must have legally completed on or before 31 March 2023. Homebuyers are expected to have the keys to their home by 6pm. Homebuilders must tell homebuyers in advance if they cannot meet these dates.
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31 March: Universal energy support payments to end
The cost-of-living support payments issued by government have been a real lifeline for many people trying to meet rocketing energy bills over the winter. As these payments come to an end for the vast majority of people further belt tightening will be needed to meet the eye watering rise in bills.
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1 April: New energy price guarantee comes into effect
April is going to see all sorts of prices rise, and higher energy prices are going to be particularly painful. The current cap of £1,277 could well rise by £500 or more. And it’s worth bearing in mind that this isn’t a fixed cap on the most you can pay: it’s a cap on prices for the average user. If you burn through more energy, or live in a large or inefficient house, you could see prices rise even further.
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1 April: TV licence fee is frozen
The government is responsible for setting the level of the licence fee and in 2022 it announced that the fee would be frozen for two years at £159 before rising in line with inflation for four years from 2024.
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1 April: Council tax rises
The Budget paperwork included the fact that councils will be able to raise tax by 3% – plus another 2% for social care – without holding a referendum. The enormous rise in the cost of social care, and the additional cost of National Insurance on council wage bills, is going to put them under real pressure, so many of them are likely to raise council tax as much as they possibly can.
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1 April: National Living wage and minimum wage rise takes effect
Chancellor Jeremy Hunt announced in November that the National Living Wage for individuals aged 23 and over would increase by 9.7% from £9.50 to £10.42 an hour.
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1 April: Water bill price changes come into effect
Several factors are used to determine changes in water bills including October inflation figures. With inflation proving particularly stubborn we can expect to see significant increases in water bills.
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1 April: Prescription charge changes could kick in
NHS prescription charges in England were frozen throughout 2022/23. This is the first time in 12 years that the charge has not increased. Whether we see a further freeze in April remains to be seen.
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6 April: Dividend and capital gains tax changes:
The Autumn Statement brought bad news to entrepreneurs and people investing outside of a pension or ISA with the Chancellor reversing Kwasi Kwarteng’s proposed dividend tax cut and slashing the threshold from £2,000 to £1,000. People receiving over £1,000 per year in dividend income will pay tax of 8.75%, 33.75% and 39.35% for basic, higher and additional rate taxpayers, respectively. In addition, the £12,300 capital gains tax threshold is being slashed to £6,000 and it will be cut further in 2024.
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6 April: Additional rate income tax threshold slashed
The 45% additional rate of income tax threshold is cut from £150k to £125,140, as announced by Chancellor Jeremy Hunt in his Autumn Statement in November, while the basic rate of income tax is maintained at 20%.
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6 April: Tax thresholds remain frozen
In addition to the changes mentioned above, there are several taxes that have and will remain frozen which means over time more of us end up paying that bit more. For instance, the personal allowance will stick at £12,570 in April, and every year until 2025/26, the higher rate threshold will be frozen at £50,270, the pension lifetime allowance is still £1,073,100. The inheritance tax nil rate band remains at £325,000, and the residential nil rate band £175,000. Plus, everything from ISA allowances to the annual gifting allowance, the high-income child benefit tax charge and the savings allowance remain the same.
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6 April: State pensions rise with the triple lock and benefits rise by the same amount
From today people receiving the state pension and other benefits will get a much needed 10.1% boost to what they receive.
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31 July: Consumer Duty comes into force
The new duty comes in for all new products and services and existing products and services open to new business and aims to improve how firms serve their customers.
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31 July: Payment on account deadline
Payments on account are advanced payments towards your tax bill if you are self-employed.
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August: Pension Dashboard staging
The timeline for the Pensions dashboard gathers pace with the deadline for large pension providers such as master trusts to connect by the end of August. They will be followed by money purchase schemes used for auto-enrolment by the end of September and then non-money purchase schemes. Staging is expected to continue throughout the remainder of 2023 and into 2024.
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September: Cost of living payments of £150 to people on certain disability benefits
If the timing is to match what we saw this year, then these payments will be due around now.
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18 October: September inflation –
used for triple lock and benefits Inflation is expected to be on its way down by this point, so we are unlikely to see the blockbusting 10.1% increase to state benefits that we saw this year. However, if the triple lock is still in place and wage data is higher than inflation then pensioners could be in line for an extra boost.
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31 October: Deadline to file paper self-assessment tax return for 2022-23 with HMRC
We are overwhelmingly filing our self-assessment tax returns online but for those who prefer a paper-based approach they will need to have submitted their forms to HMRC by this date.
25. November: Winter fuel payments
As we head back into Winter, we will see the return of Winter Fuel payments for those who qualify. Pensioners will be in line for an extra £300 cost of living payment.
Jasmine Birtles Says
Founder of MoneyMagpie Jasmine Birtles has advice for us on the financial changes in 2023:
“There are all sorts of gloomy predictions for our finances in 2023 but if the last few years have taught us anything it’s that predictions can be wildly out and experts really don’t get it right all the time (and I speak as one of those ‘experts’!).
“So don’t allow other people’s fear and anxiety to rub off on you. There are infinite opportunities for making money and finding help for free this year as in any other year. It’s truly amazing what we can uncover, and what just turns up, when our thought is open to the possibilities of good and closed to fear and dark forebodings.
“This year, I predict, there will be surprising opportunities for interesting work, ways to help others that bring in even more good for you and all sorts of free experiences and goodies that you didn’t know were around.
“Tough times are also learning times and they can be strengthening too. Frankly as a society I think we need to be strengthened and woken up generally. Having to face hard experiences and make tough decisions can help to strengthen all of us, particularly if we have some support to do it. Get together with strong and supportive friends and find ways to help each other keep going as that way you all benefit.”
