A raft of changes to benefits, tax and wages came into effect in South East Cornwall and across the country at the weekend.

New rates for wages, benefits and tax came into force at the start of the new financial year, along with changes to pensions and savings.

Citizens Advice Cornwall is encouraging people to see whether the changes will affect their household finances, so they can plan ahead.

Liskeard-based Citizens Advice Cornwall chief executive, Neil Colquhoun, said:  ‘Keeping on top of changes that can affect your finances is one of the key ingredients to managing your money today and planning for tomorrow.

‘It’s important to get to know which new rules will apply to you, and the difference they could make to your budget.

‘Weighing up different changes can be complicated and if you’re not sure whether you’re affected or how, Citizens Advice can help. We can also help you build your money skills, from making use of technology to track your finances to working out how different deals compare.’

The changes are:

Income

The National Living Wage for people over 25 rises from £7.20 to £7.50. 

There are also increases to the national Minimum Wage for younger workers. 

From April 1, 18- to 21-year-olds who start a new claim for Universal Credit will not be automatically entitled to the housing element of the benefit.

Standard rates of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay will rise from £139.58 to £140.98 per week (or 90 per cent of the person’s average weekly earnings if lower).

New claimants for Employment and Support Allowance (ESA; which has replaced incapacity benefit) aged 25 or over, who the government assesses as capable of working at some point in the future, will receive £73.10 a week, £29.05 less than previously. This does not affect people who have already been assessed for ESA. 

New claimants for ESA under 25 will receive £57.90 throughout their claim.

Child tax credits will be restricted to two children. 

If you already have two or more children, you won’t be affected - the limit only applies to children born after April 6. There are also a number of exemptions, for example for twins. 

Taxes

The personal allowance will rise from £11,000 to £11,500. This means you’ll only pay tax on earnings over £11,500.

The higher rate tax threshold will also rise from £43,000 to £45,000. This means that you’ll only pay higher rate tax (40%) on earnings above £45,000

Council tax in Cornwall will rise by 3.97% on 1 April. 

Pensions and savings

The state pension will rise by 2.5%. 

For people who reached retirement after April 2016, this will rise to £159.55 a week and £122.30 for anyone who retired before April 2016.

The amount you can save in an ISA will rise from £15,240 to £20,000 a year.