From energy price caps to expected interest rate rises, what will affect the money in your pocket in 2018?
If your new year’s resolution is to get on top of your finances in 2018, then it’s useful to know what’s going to be impacting your cash over the next 12 months. We’ve got details of changes that are coming up in 2018, as well as some top tips for how to handle them.
There’s some good news for those struggling with their energy bills. From February, a price cap will be introduced for a million vulnerable energy customers who currently receive the Warm Home Discount. On average, the cap will save households £120 on their energy bills, according to Ofgem.
The Government has also announced a price cap for all customers on a standard variable tariff, although the legislation probably won’t come into effect until the end of next year.
The Base Interest Rate started creeping up at the end of 2017 and experts have predicted that 2018 will see several further rises. This is good news for savers who might see a boost to their pot, but if you have a mortgage on a Standard Variable Rate, you need to be prepared for your monthly payments to rise. Using an online mortgage calculator can help you get a clearer picture of how your payments might change so you can budget accordingly.
From April 2018, private landlords will be required by law to ensure their properties achieve an energy efficiency rating of at least an E under the MEES (Minimum Energy Efficiency Standards) legislation.
It’s good news for tenants as you’ll probably need your heating on less, leading to savings on your bills, although there is a chance some landlords may pass on the cost of having to upgrade buildings that don’t comply through rent increases.
Good news for those looking to get on the property ladder, stamp duty is being scrapped on properties worth up to £300,000 for first-time buyers. The move is expected to save four out of five first-time buyers up to £5,000.
The cost of motor insurance is expected to rise next year. Annual prices now stand at an average of £847 , and experts are predicting they could top £1,000 in early 2018.
Increases can be put down to a raft of recent rule changes. Insurance premium tax has jumped in the past two years, up from 6% to 12.5%, while amendments to the Ogden Rate – used to calculate personal injury payments – have added £3 billion to insurers’ costs, which are being passed on to motorists.
When your policy is up for renewal, it’s worth shopping around to make sure you are getting the best deal. If it’s an option, you might also find it’s cheaper to pay annually rather than monthly.
The cost of going abroad is also anticipated to jump in 2018, with package holiday rates expected to increase by up to 9%. Currency contracts secured by travel companies before the EU referendum are coming to an end, so the cost of the falling value of the pound is likely to be passed on to customers.
To try and save some pennies, why not use package holidays as inspiration but see if it works out cheaper booking a hotel direct and flying with a budget airline?
Regular train users could benefit from a new 26-30 railcard due to be launched in spring 2018. It’ll cost around £30 upfront, but save people up to a third off non-peak fares.
From the start of a new tax year on April 6 there’ll be a little extra money in your pocket each month as the Personal Allowance rises from £11,500 to £11,850.
The National Living Wage will also rise to £7.83 an hour for those over 25 from April, adding around £50 a month to people’s pay packets.