Spring into the new tax year: 7 tips to prepare your finances

Rising prices have become a fact of life over the past few years and April can be a particularly tricky month, as this is when increases to household bills tend to kick in. 

In the past few years, these price hikes have been exacerbated by frozen income tax thresholds, which have resulted in millions being dragged into a higher tax band. 

Here, we explain what the 2025-26 financial year has in store for your budget, plus the steps you can take to minimise the impact of this year's changes.

First in Which? Money magazine

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1. Council tax

Local authorities in England with social care duties can raise council tax rates by up to 5% each year, and our analysis shows eight in 10 will do so by the maximum amount. 

Councils that plan to raise rates by more than 5% must normally hold a local referendum first. 

However, for 2025-26, the government has allowed six councils to increase taxes by up to 10% without a referendum. All in all, the average annual council tax bill in England will rise by £106 in the new tax year.

In Scotland, all 32 local authorities have announced increases, averaging 9.6%. The biggest hike is in Falkirk at 15.6%. 

In Wales, tax rises range from 5% (Bridgend) to 9.2% (Pembrokeshire). Northern Ireland uses a domestic rates system instead of council tax and has confirmed rises ranging from 3.65% to 5.99%.

• Find out more: council tax calculator.

What you can do

If you think your home is in the wrong band (for example, because your neighbours are in a lower band than yours), you can ask the Valuation Office Agency (or the assessor in your local council in Scotland) to reevaluate it.

More than 10,000 households in England and Wales successfully appealed for their council tax band to be lowered in 2023-24, which amounted to 27% of all resolved cases. 

Separately, you may qualify for a council tax reduction or exemption. This generally depends on who lives in the property or how it’s being used. See our full guide for further information. 

2. Energy bills

Energy prices had returned to relatively normal levels following the eye-watering highs that accompanied Russia’s invasion of Ukraine. 

But bills have started to rise again this year, and more pain is on the horizon for household budgets. 

From 1 April, the energy price cap will rise to £1,849 a year for a typical dual-fuel consumer, an increase of 6.4% compared with January’s cap.

• Find out more: energy price cap explained.

What you can do

After a long drought of options, it’s now possible to switch to a fixed energy tariff to save money.

When we last checked on 27 February 2025, we found more than 30 tariffs that would cost less than the price cap that applies from April-June 2025. 

You could also save by adding loft insulation. If you have none and add the recommended 270mm of insulation, you could save up to £200 per year. 

Using appliances more efficiently, getting your boiler serviced annually and adjusting the flow temperature on your boiler could also help lower bills.

Use our free, independent energy comparison service to compare gas and electricity prices, and find the best provider for you

3. Water bills

Water companies are looking to their customers to help them clean up their finances, with the average annual water bill in England and Wales set to rise by £123 from April. 

These price hikes are part of a series of increases over the next five years, which water companies say will be used to pay for supply upgrades and to reduce sewage discharges.

In England and Wales, the average bill will hit £603, but it will vary depending on which region of the country you live in. 

Average bills in Scotland will rise by £44 per year. Households in Northern Ireland aren’t billed for water.

• Find out more: water bill price hikes.

What you can do

You might be able to save money on your water bill by requesting a water meter or, if that’s not possible, asking for an assessed charge.

An assessed charge is based on average bills paid by customers who don't have water meters. 

You could also reduce your water consumption or check to see if you’re eligible for a social tariff.

4. Stamp duty

Moving home is set to become more expensive, as the temporary stamp duty holiday in England and Northern Ireland is about to end.

From 1 April, home movers will pay stamp duty on purchases of more than £125,000 rather than the current £250,000. This will result in stamp duty bills rising by £2,500.

The threshold for first-time buyers will fall to £300,000 from the current £425,000. This will result in more first-time buyers becoming liable for stamp duty. 

The tax already went up two percentage points at the end of October for those buying a holiday or second home, or a buy-to-let property. 

• Find out more: stamp duty calculator.

What you can do

If you're in the process of buying a home, but will miss the 1 April deadline, you might want to consider renegotiating your offer to take into account the higher tax bill.

If you're considering selling your home this year, it will be even more important than before to price competitively to attract interest. 

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5. Income tax

During the Autumn Budget, Chancellor Rachel Reeves announced that the deep freeze on income tax and NI thresholds – first implemented in 2022 – would end in 2028.

From 2028-29, personal thresholds will be increased in line with inflation. But this will be scant consolation for taxpayers who've already experienced the pain of fiscal drag and found themselves pulled into higher tax brackets.

By the time the thresholds thaw, the Office for Budget Responsibility (OBR) forecasts that an additional 7.8 million taxpayers will have been dragged into higher tax bands as a result of the freeze. 

If thresholds had been uprated each year in line with inflation, the personal allowance would be set at £15,220 in 2024-25 (over £2,500 more than the current level). And the higher-rate threshold would have increased to £61,020 (almost £11,000 higher than its current rate).

Slipping into a higher tax band has implications for capital gains tax, dividend tax, personal savings allowance and marriage allowance.

• Find out more: income tax calculator.

What you can do

There are steps you can take to prevent you slipping into a higher tax band. For example, by contributing to a pension scheme through salary sacrifice, you can reduce your take-home pay.

You’ll benefit from tax relief on your contributions up to 100% of your annual earnings. For example, if you earn £30,000 a year, you can get relief on up to £30,000 paid into your pension in a single tax year. 

Your employer may also offer other salary sacrifice schemes, such as annual rail season ticket loans or private healthcare.

You could also reduce your taxable income by making a charitable donation. When you donate through Gift Aid, the donation is net of tax, so the charity can reclaim an additional 20% of the balance directly from HMRC.

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6. Broadband

January marked a victory for both Which? and consumers, as broadband providers can no longer include unpredictable price rises linked to inflation in customer contracts. The change comes after our Right to Connect campaign called for these price rises to be banned.

Mid-contract price rises haven’t been prohibited entirely, but providers are now only able to include them if clearly detailed in their contracts. 

Several of the UK’s major providers have said they will move to a fixed-price increase model, raising the cost of the majority of their deals at the end of March or the beginning of April. Most major providers have stated they will increase monthly bills by either £3 or £3.50.

If you took out your broadband deal before the introduction of fixed-price increases, the cost of your contract will still be increased under the old rules.

• Find out more: best and worst broadband providers.

What you can do

Not every broadband provider puts prices up mid-contract – Hyperoptic, Utility Warehouse and Zen Internet all promise not to raise prices during your minimum contract period.

When you come to the end of your broadband contract, it’s worth weighing up a switch. Our research has shown that broadband customers who switch away from the Big Four providers (BT, Sky, TalkTalk and Virgin Media) can save as much as £165. 

You should also look out for incentives, such as vouchers or reward cards for switching. Vouchers for £100 aren’t uncommon. 

And don’t be afraid to haggle. Our research shows that broadband customers who did so saved as much as £81 annually. Remember, too, that cheaper social tariffs (starting from £12.50 a month) are available for customers who receive certain benefits such as universal credit and pension credit.

7. Rail fares

Train fares in England and Wales rose by 4.6% in March, and the cost of most railcards went up by £5.

Annual increases to regulated rail fares (season tickets and most commuter fares) are set by the government. 

They’re normally linked to the previous July’s Retail Prices Index (RPI) measure of inflation.

However, the 4.6% increase to regulated rail fares in 2025 is one percentage point above July’s RPI – a move decried by commuter advocacy groups.

• Find out more: your rights when buying train tickets.

What you can do

Despite the rise, if you’re eligible for a railcard and make a few off-peak train journeys each year, the amount you save will mean it more than pays for itself. 

Most can still save you up to a third of the cost of eligible journeys.

Where you buy your ticket can also make a difference. A Which? Travel investigation found that passengers who buy their fares from a ticket machine could pay more than double. Tickets bought online were cheaper around three quarters of the time. 

You can also save money by buying tickets in advance or taking advantage of split tickets.

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