Financial changes happen all the time, from interest rates to the pound against the euro, but they can be hard to keep up with or understand.
2020 will see some big changes – some never seen before, others typical changes that happen most years.
Happily, most of the list features positive changes that will help you save money , but of course there are some that are bad news.
But it’s better to be aware and able to prepare, so here are 10 money changes coming this year that you ought to know about.
1. Pension changes
There are a couple of changes when it comes to pension savings , some welcome, others not so.
The pensions lifetime allowance will increase from £1,055,000 to £1,073,000 in April – this is the maximum you can save into a pension before high tax charges apply – we’re talking as high at 55 per cent.
On April 6 the state pension will go up from £168.60 to £175.20, but on the flip side state pension age will go up from 65 to 66 on October 6, and is expected to go up again between 2026 / 2028 to 67.
2. No more free TV licences
The announcement hit the headlines and caused debate, and the changes come into force this year.
From June those over 75 will no longer get a free TV licence, unless they’re on pension credit.
This means more than 3.7 million more people will need to pay – and the annual cost of this could be as much as £154.50.
3. Simpler overdrafts
The Financial Conduct Authory has decided, quite rightly, that overdraft charges out to be fairer and clearer, so that they are easier to manage and don’t catch people out.
There will be a number of measures to ensure this, including the introduction of simple annual interest rates and putting an end to high charges for unarranged overdrafts.
4. A new £20 note
We love it when there’s a new face on our notes, but this change is even more exciting than that – £20 notes will be going polymer.
Like its £5 and £10 note counterparts the paper £20 will be phased out for a more modern version – the current £20 notes have been in circulation since March 2007 after all.
You can expect to see these shiny new versions in pockets from February 20 – and we recommend spending those old notes, as they won’t be accepted after August 20.
5. Benefits freeze to end
Working age benefits such as Universal Credit and Jobseekers’ Allowance will increase by 1.7 per cent. This is the first increase since the government freeze in April 2016.
6. Air passenger duty increase
Who even knew this existed? But don’t worry, it’s not a biggie.
If you’re flying after April 1 this year air passenger duty will go up by £2 for economy seats and £4 for premium.
7. Cheaper broadband, TV and phone contracts
This is great news. You know those cheap new customer deals you sign up to for your phone and Internet contracts, then forget about until you realise they’ve gone up huge amounts? That’ll no longer be allowed.
From February 15 broadband providers must let customers know when their contract is coming to an end and let them know of the best deals, so you know if you should switch or stay.
8. A new tax year
April 6 means a new tax year, and with it come a number of changes. The most important one for you is to do with your ISA allowance, as this is when it resets.
If you have an ISA and haven’t maximised the 2019/20 allowance of £20,000 you should do that now, as come April it resets and you can’t roll over any leftover allowance to the next year.
9. Inheritance tax changes
Although the inheritance tax threshold of £325,000 will not change until 2021 the additional amount you can leave to a spouse, known as the additional nil-rate band, will increase from £150,000 to £175,000.
Married couples who use all of their allowance can therefore pass on a property worth up to £1 million before paying inheritance tax.
10. Student loan repayment changes
Good news for graduates who want to avoid paying back their student loan – the wage you can be on before paying it back has risen again.
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Those who started university from 2012 can earn up to £26,575 a year before making any repayments.
If you started between 1998 and 2011 the repayment threshold will increase to £19,390 a year.