In January 2025, the financial landscape is undergoing significant changes that could impact your household bills. From increases in energy bills to new regulations concerning broadband and mobile services, here’s a rundown of the key money changes to be aware of this month.
Starting off the list of updates is the rise in the Ofgem energy price cap on January 1st. The cap has been adjusted from £1,717 to £1,738 per year for a household using an average amount of energy and paying via direct debit. It’s worth noting that individual bills may vary based on actual energy consumption levels. Additionally, Ofgem reviews the price cap every three months, with upcoming revisions scheduled for April, July, and October.
Another change effective from the beginning of the year is the end of the VAT tax break for private schools. As of January 1st, private schools are now subject to a 20% VAT charge on education and boarding fees. This adjustment was announced by Chancellor Rachel Reeves in the previous year’s Budget.
On January 15th, the first inflation update of the year will be released. Currently standing at 2.6%, inflation measures the rate of price changes over time. Although this figure has decreased from its peak in October 2022, it remains above the Bank of England’s target of 2%. The Office for National Statistics regularly publishes new inflation data on a monthly basis.
New rules are set to come into effect on January 17th regarding price rises for broadband and mobile services. A ban will be implemented to prevent telecom companies from introducing mid-contract price increases linked to inflation. This measure aims to provide clearer information to customers about annual price adjustments in monetary terms.
For those eligible for Winter Fuel Payment, the deadline to claim is January 29th. Individuals who have not yet received their payment can contact the Winter Fuel Payment Centre before this date. The eligibility criteria now stipulate recipients must be of state pension age and receiving a means-tested benefit like Pension Credit.
On January 31st, the deadline for filing self-assessment tax returns for the 2023/24 tax year is due. Failure to meet this deadline could result in a minimum fine of £100, irrespective of any tax liabilities. Outstanding tax from the previous tax year should also be settled by this date.
In summary, the start of 2025 brings several significant financial changes that could impact your budget. From adjustments in energy prices and VAT charges for private schools to regulatory updates on broadband and mobile service pricing, it’s essential to stay informed about these developments to manage your finances effectively. Be aware of deadlines, such as the Winter Fuel Payment claim cutoff and the self-assessment tax return submission, to avoid penalties and ensure compliance with the latest financial regulations.