With the commencement of the new financial year, a range of benefits and the state pension are set to increase, including augmented financial support for larger families receiving Universal Credit.
The two-child benefit cap has now been abolished, potentially impacting approximately 480,000 families with three or more children, who may see an average annual increase of £4,100.
One mother shared with the BBC that the rise constitutes a “massive help” amidst the escalating cost of living, while charitable organizations have lauded the move as a “gamechanger.”
However, some critics have posited that the government could potentially allocate these funds more effectively elsewhere.
For the past nine years, parents have been limited to claiming Universal Credit or tax credits for their first two children, a policy estimated to have saved the Treasury approximately £3.6 billion annually.
Tracey Morris, a single mother from Huddersfield, has five children aged between six and 19. Her youngest two children, Luna and Harlie, were born after the introduction of the cap.
Like 59% of families who will now receive increased support, she is employed, working full-time for the local council and occasionally taking on extra shifts at a pub to supplement her income.
“I’ve always had to be careful what I spend and how I spend it. The cost of living got so high, it’s a struggle,” she said.
She relies on her local food pantry, The Bread and Butter Thing, to ensure she can purchase basic groceries.
“It’s so draining. I’m exhausted worrying about money all the time. As a mum, sometimes you feel like you’re failing, but I’m not failing, it’s just the situation, unfortunately, that we are in,” she said.
While many bills have increased at the beginning of April, Tracey will now receive just under £300 extra each month for each of her three children.
The child element of Universal Credit will automatically increase from May onwards, according to the scheme’s mechanics, so eligible parents do not need to apply.
Additional changes to the basic allowance for Universal Credit, paid to all benefit claimants, mean that approximately three million families will receive an average increase of £120 this year.
However, the health element of Universal Credit, paid to claimants whose disability restricts their ability to work, is being halved. The 2.8 million existing claimants of the health element will be protected, with the cut only affecting new claimants.
Other benefits, including all the main disability benefits, such as Personal Independence Payment, Attendance Allowance, and Disability Living Allowance, as well as Carer’s Allowance, have now risen by 3.8%, in line with rising prices.
The state pension is also increasing by 4.8% in line with average wages, due to the triple-lock, which means:
In general, you need 35 years of qualifying contributions to get a full state pension.
However, the age at which people receive their state pension is rising gradually over the next two years, from 66 to 67.
Various other changes also come into force at this time of year, including alterations to inheritance tax on farms, tax on dividends, tax relief on venture capital trusts, and homeworking tax relief.
It also marks another year in which income tax thresholds have been frozen.
This means more people start paying tax – or move into higher tax brackets – as wages rise.
The Conservatives initially froze thresholds until 2028-29 and then in November Labour extended that until 2031.
The move raises additional revenue to pay for public services but is often called a stealth tax by economists because it increases the tax take without a government having to put up rates.
The BBC has created a calculator to see how your pay could be affected.
The calculator applies to employees in England, Wales and Northern Ireland. Tax bands in Scotland are different, and self-employed workers are taxed differently.
Charities say families are facing financial worries as changes to disability benefits come into effect.
One elderly couple had to find £1,000 for an oil delivery and suppliers are not giving quotes, a councillor says.
The nine-year policy that capped financial help at two children has been removed.
Leader Nigel Farage said the party had reached a “settled position” on the triple lock after debating scrapping it.
Consumers will be able to cancel unwanted subscriptions ‘at the click of a button’, the government said.