It’s always important to stay alert to changes that could have an impact on your financial health. There are several changes planned, or at least possible, this summer. They could all have a significant impact on your financial standing. Here is what you need to know.
Interest rates could go up
The Bank of England Monetary Policy Committee is the body that’s responsible for setting the UK’s interest rates. Its remit is to keep inflation in the UK at 2%. Officially, it is allowed a 1% margin of error (in either direction). Unofficially, the government has given the MPC significant leeway over recent years. This gave it breathing space as it struggled to combat the effects of Brexit (and COVID).
This leeway cannot, however, go on forever. At some point, the MPC has to start fulfilling its remit as it is supposed to do. That means either the government has to increase the inflation target or the MPC will have to start raising interest rates to meet the 2% target. The most likely times for it to do so is during its regular meetings. The next meetings are scheduled for June and August.
If the MPC raises interest rates, it will hurt borrowers, such as mortgage holders. On the plus side, however, it will benefit savers. High inflation, by contrast, raises the cost of living for everyone.
The Energy Price Guarantee is set to expire
The Energy Price Guarantee (EPG) is set to expire at the end of June. Ofgem (the UK’s energy regulator) is expected to announce a new Energy Price Cap in August. In theory, Ofgem could lower or raise the Energy Price Cap. In practice, it seems realistic to assume that inflation will force them to increase it.
Any increase in the Energy Price Cap would be very likely to have a significant impact on household bills. What’s more, the new price cap would be expected to be implemented in October. This is exactly the time when people in the UK start to have a greater need for heating.
The government may offer some form of relief. If it does, however, it is likely to be carefully targeted for cost reasons. What’s more, it may not be enough to cushion the financial blow completely.
Fortunately, all UK householders, including renters, have a window of opportunity to protect themselves from the effect of this potential increase. Arguably the most important step is to make sure that your home is as well insulated as it can possibly be. You might also want to see if you can make your heating smarter. You should definitely make absolutely certain that you are on the best energy tariff available to you.
Tax payments on accounts are due in July
If you file a tax return (e.g. you’re self-employed), then you may be asked to make payments on account. Essentially, these are instalment payments for your tax bill. If you are having an issue making these payments, then it’s advisable to speak to an accountant as quickly as you can.
If you are not using the services of an accountant, you have the option to contact HMRC directly for assistance. It is, however, important to note that HMRC\’s phone lines can have substantial wait times during key tax periods. That\’s one of the reasons why it is highly recommended to address any concerns or queries as early as possible.
Likewise, if you believe that HMRC has miscalculated your tax, raise the matter with them as quickly as you can. Again, if you don’t have an accountant, you can speak to them yourself.
It’s time to say goodbye to stamps without barcodes
The Royal Mail has introduced new barcoded stamps. From July, these will be the only stamps they will accept. If you still have old stamps, you can swap them out for barcoded ones using a swap-out form provided by the Royal Mail. Traditional stamps are not, however, disappearing completely. Special stamps with pictures and Christmas stamps without barcodes will continue to be valid (for no
