.jpg?la=en&h=650&w=1440&hash=7D75B3C67ED0E643268D21E211274D9D)
Image credit: Shutterstock/ Yau Ming Low
Get all our latest money stories and exclusive offers direct to your inbox. Sign up here.
This article is for general guidance only and is not financial or professional advice. Any links are for your own information, and do not constitute any form of recommendation by Saga. You should not solely rely on this information to make any decisions, and consider seeking independent professional advice. All figures and information in this article are correct at the time of publishing, but laws, entitlements, tax treatments and allowances may change in the future.
A new tax year always brings financial changes, but April 2026 is shaping up to be particularly expensive for many households. Several everyday costs are climbing at once, while long‑standing tax allowances remain frozen.
Before the bills land, here’s a clear rundown of what’s changing — and how to minimise the hit.
What’s on this page?
Bills in England and Wales will rise by an average 5.4%, taking the average bill from £606 to £639. In Scotland they will rise 8.7%, or £42. (There’s no rise in Northern Ireland, since households don’t pay water charges).
What you can do about it: Although you don’t have the option to change suppliers, there are some measures you can take to ensure you’re on the cheapest tariff. Rajan Lakhani, head of money at Plum, suggests: “Look into getting a water meter, and request a ‘water assessment’ from your provider. This involves checking for leaks, pipe issues and areas where water may be wasted.”
All councils that issue council tax bills are increasing them for the next financial year. In England, they’re allowed to increase by up to 4.99% without resident consultation, but some councils have been given permission to raise their bills by more than this, including North Somerset, Shropshire and Worcestershire, where rises in these areas will be 8.99%. Just 28 out of 153 authorities in England are increasing bills by amounts smaller than the full 4.99%, including Durham, Hartlepool, Wandsworth and Westminster.
In Scotland, most councils are raising council tax by above 6%, with Aberdeenshire and Moray seeing 10% increases. Only Edinburgh, Fife and Glasgow have increases below 6%.
In Wales, the average rise from April is 4.9%.
What you can do about it: There are steps you can take to see if you’re eligible for reductions on your council tax, such as a single-person discount and disability allowances, and you can challenge your council if you think your property is in the wrong band. Don’t ignore council tax bills – arrears can escalate quickly. Contact your council if you need to discuss payment plans.
In simple terms, dividends are paid to investors who own shares in a company, but you pay tax on them if you exceed your annual dividend allowance, currently £500, and not rising in April.
The dividend tax rate will increase from 8.75% to 10.75% for basic rate taxpayers, and from 33.75% to 35.75% for higher rate taxpayers.
What you can do about it: Arjun Kumar, co-founder of Taxd, says: “The £20,000 you can currently put in an ISA is your best friend. Use it to shield your savings before the new rates come into force, as your ISA savings are always free of taxes.”
If you are married or in a civil partnership, it can make sense to transfer investments to your partner if they are less likely to go over their dividend allowance, or if they pay a lower rate of tax.
The licence fee is increasing from £174.50 to £180.
What you can do about it: If you are struggling with the cost of a TV licence, there are alternative ways to pay, including the Simple Payment Plan.If you don’t watch live TV or use BBC iPlayer, you may be exempt. More details at the TV Licensing website.You can also check if you’re eligible for a free or discounted TV licence.
A major bugbear for many consumers – the hikes from providers that come in despite you already being in a contract.
For example, Sky is increasing broadband and TV packages by £3 each. There is some good news, as certain providers have frozen prices until 2027. These include BT, Plusnet and Vodafone for broadband, and Lebara, Smarty and Asda for mobiles.
What you can do about it: If you’re not locked into a contract, shop around for a cheaper deal. Ringing your existing provider and asking to cancel can sometimes lead to you being offered a discount.
This is the amount of money you can earn before you start paying tax. This has been frozen at £12,750 since 2021, until 2031. Kumar says: “If you have even a tiny bit of private pension or part-time income on top of your state pension, you’re now a taxpayer. We’re seeing ‘fiscal drag’ in real-time; your income goes up, but the taxman takes his cut sooner because the goalposts haven't moved since 2021.”
What you can do about it: Charity donations or paying money into your pension (if you haven’t retired yet) can reduce your ‘net adjusted income’ and therefore your tax liability.
Read more about actions to take before the tax year end and how to stack tax allowances, as well as whether you’ll have to pay tax on your state pension.
According to Nicole Zalys, ‘The London Accountant’: “Employees required to work from home by their employer could claim tax relief directly from HMRC on additional household costs – such as heating and electricity – either based on actual costs or at a flat rate of £6 per week, worth around £62 a year for a basic rate taxpayer, £124 for higher-rate taxpayers.
“From April 6 this year, that ability to claim relief directly from HMRC is abolished. Now, the only tax-free support available for homeworking costs is where an employer reimburses those expenses directly.”
The standard tax rate for all petrol, diesel or hybrid cars registered after 1 April 2017 rises to £200 on 1 April. Drivers of electric cars under a year old will also start paying this from April.
Road tax amounts for cars registered before 2017 depend on the car’s age, fuel used and its emissions.
The “expensive car supplement” increases from £40,000 to £50,000 for electric vehicles from 1 April.
Meanwhile petrol and diesel prices have shot up to the highest levels in nearly three years as a result of the US-Israeli military action in Iran.
What you can do about it: There are various websites and apps, such as Fuel Finder, which allow you to see the cheapest fuel prices near you. Consider cutting out unnecessary journeys or using public transport if it’s cheaper for your journey. Driving smoothly, accelerating gently, taking unnecessary weight out of your car and keeping tyres properly inflated can also keep fuel costs down.
Those with EVs can help to lower their costs by being careful with their charging habits.
Mark Sait, CEO of SaveMoneyCutCarbon, told us: “For EV owners, one of the most effective ways to manage spend is through how and when they charge. Charging at home on an off-peak tariff is typically far more cost-effective than relying on public rapid charging. In practical terms, that can mean a full charge costing closer to £10-£15 at home, compared to £30-£40 on public networks. “Smart charging plays an important role here, allowing vehicles to charge automatically when electricity is cheaper.”
Inheritance tax is hitting farms and businesses from April, ahead of its introduction to unspent pension pots in April 2027.
David Little, partner in financial planning at Evelyn Partners, explains: “From April 6, the current 100% rates of agricultural property and business relief will apply only to the first £2.5 million of relevant assets.
“The new cap means many business owners and their families face a greater inheritance tax (IHT) bill at death. AIM-listed shares will only receive 50% relief.” Little adds: “In some cases, an unexpectedly large IHT bill can jeopardise the future of a firm, and the jobs it provides, if the liquid assets are not there to meet the expense.
What you can do about it: Little says: “We would encourage all business owners who might be affected by the changes to have a conversation with a financial planner or tax adviser as soon as possible. There will still probably be advantageous financial planning options.”
The energy price cap will reduce from 1 April – but conflict in the Middle East means that price rises will almost certainly come in July.
The energy price cap, set by Ofgem, will drop by 7% from 1 April to 30 June this year, lowering typical annual bills by £117 to £1,641 for direct debit users. Stephen Lerner, partner at Sampson Fielding, explains: “The price cap restricts the maximum standing charge and unit rates, but the exact amount to pay depends on usage.” To ensure you’re being charged the correct amount, Lerner suggests you submit meter readings to your supplier (unless you have a smart meter) on or around April 1 to ensure you are charged correctly for energy used before and after the rate changes. Lerner says: “UK energy bills are expected to typically rise by £332 from July 2026 as the Ofgem price cap climbs to £1,973. The ultimate scale of any further increase will depend on how long the war continues.
“If it is resolved, the cap could come down in October. But if it continues, there is a real risk of the average price going above £2,000 a year.
“In addition, UK inflation could reach 5% in 2026 due to higher energy costs.”
Businesses are already feeling the pain of higher energy costs since they are not covered by the energy price cap.
What you can do about it: You might be doing these already, but small actions to save energy can add up. Draught proofing, taking shorter showers, air drying clothes instead of tumble drying, and turning your flow temperature to between 55 and 60 degrees on your combi boiler, can save nearly £200 a year when added together.
To help people understand how some of the changes will affect their finances, Money Wellness – the government’s online resource – has launched an updated interactive Household Bills Calculator. Users can enter their current household costs and the tool produces a forecast showing how much bills are likely to rise over the next year so you can plan ahead.
With our Stocks & Shares ISA and General Investment Accounts. Capital at risk.
We reveal 5 key tax allowances you can ‘stack’ to achieve a significant tax-free income.
Find council tax discounts and reductions, how to appeal your band, and how to manage your payments
Learn how to reduce your energy bill without living miserably.
We explain the government’s plan to waive tax for some, and what it means for your retirement income.
