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Every Money Change in April 2026: What Goes Up, What Comes Down

April is always the month the UK's finances get reshuffled. New tax year, new rules, new bills — some welcome, most not. This April is one of the busiest in years. Energy is falling, but council tax, water, broadband, TV licences and dividend tax are all rising at the same time. Whether you're a worker, investor, landlord, or just trying to keep your household budget intact, here's everything changing and exactly what it means for your pocket.

Energy Bills: The One Bit of Good News

For the first time in a few years, energy bills are actually going down in April. The Ofgem price cap for Q2 2026 (April to June) has been set at £1,641 per year for a typical household — a drop of £117 from the £1,758 Q1 cap. That works out to roughly £9.75 per month less on your energy bill.

The cut is driven by lower wholesale gas prices and a government decision to remove some environmental scheme costs from bills. Even households on fixed-rate tariffs should see a small saving from April, as certain policy charges are stripped out across the board.

That said, don't pop the champagne just yet. The Resolution Foundation has warned that the energy price cap will almost certainly rise again in July 2026, potentially back toward £1,800–£2,100 per year depending on wholesale markets — which are being pushed around by the ongoing conflict in Iran. So this spring dip is real but likely temporary.

What to do: If you're on a standard variable tariff, you're automatically protected by the cap. If you're considering fixing your energy price, use a comparison site like MoneySuperMarket or Uswitch to model whether a fix makes sense given where prices might head later in the year. Fixing now could lock in rates close to the cap floor — or could mean missing out if prices fall further.

Council Tax: Up by 5% Almost Everywhere

This one stings. The average Band D council tax bill in England is rising by around 5% in 2026/27 — taking the typical annual bill from about £2,280 to approximately £2,394. That's an extra £114 a year, or £9.50 a month.

The 5% cap is made up of a 3% core increase for general services and a 2% adult social care precept. In practice, the vast majority of councils across England are applying the full 5% because — as they'll tell you loudly — they have no other choice. Some councils with acute financial problems have been given special permission to raise bills even higher, up to 8.99%.

The variation across the country is significant. Wandsworth in London currently has the cheapest Band D bill in England at £1,028.21 for 2026/27, while Dorset tops the table at £2,765.02. You can check exactly what your bill is rising to by searching "[your council] council tax 2026/27" — or checking the letter that landed on your doormat.

In Wales, bills are rising by an average of 5.2% in 2026/27. Scotland has no cap at all, and increases range from 4% to 10% depending on council. Northern Ireland uses domestic rates rather than council tax, and those are also rising.

What to do: Council tax reductions are available if you live alone (25% single person discount), if everyone in your home is a full-time student (exempt entirely), or if you're on a low income (council tax reduction scheme). It's worth checking with your local council if you're not already claiming any discount you're entitled to. Also worth doing: check your council tax band using the Valuation Office Agency website. Around 400,000 homes in England are estimated to be in the wrong band — if yours is too high, you can challenge it and get a refund going back years.

Water Bills: Another Year, Another Rise

Water bills are going up by an average of 5.4% from 1 April 2026 — adding around £33 to the typical annual bill, taking it to £639. But the headline average masks some significant regional differences.

Customers of United Utilities in the North West face the largest rises, averaging £57 more per year. Southern Water customers are up by £55, Hafren Dyfrdwy by £54 and Severn Trent by £52. Southern Water customers also pay the most overall, with a typical annual bill of £759.

Scottish households in the publicly run Scottish Water system face an even sharper rise of 8.7%, adding an average of £42 a year to take the typical bill to £532.

What to do: Unlike energy and broadband, you can't switch water supplier — you're stuck with whoever services your area. But you can apply for a WaterSure tariff if you're on a low income and use a lot of water (for medical reasons, for example), or if you have a large family. Most water companies also offer social tariffs with reduced rates for customers on benefits or struggling financially. It's worth ringing your water company directly to ask what they offer.

National Living Wage: Workers Get a Pay Rise

Not everything in April is bad news. Workers aged 21 and over saw their National Living Wage rise from £12.21 to £12.71 per hour from 1 April 2026. That's a 4.1% increase — above inflation for most people.

For someone working a typical 37.5-hour week on the minimum wage, that works out to around £24,773 per year before tax. The previous rate gave them £23,809, so the annual increase is roughly £964 for a full-time worker.

Younger workers saw even bigger percentage rises as the government continues to equalise the minimum wage across age groups. Workers aged 18 to 20 saw their rate jump from £10.00 to £10.85 — an increase of 8.5%.

What to do: If you employ staff, you need to have updated your payroll from 1 April. HMRC can impose penalties for underpayment — even if it was accidental. If you're a worker and you think you're being paid below the new minimum, you can report it to HMRC online.

Income Tax Thresholds: Still Frozen (Until 2031 Now)

The personal allowance — the amount you can earn before you pay income tax — remains frozen at £12,570. It has been stuck at this level since 2021/22, and Chancellor Rachel Reeves extended the freeze at Budget 2025 all the way to April 2031.

This is fiscal drag in action. Because wages have risen over recent years while the threshold hasn't moved, more people are being pulled into paying tax — or into higher tax bands — than before. The basic rate band (20%) covers earnings from £12,570 to £50,270. The higher rate band (40%) starts at £50,270 and hasn't changed either.

The inheritance tax-free allowance (Nil Rate Band) is also frozen at £325,000 until 2031. With house prices elevated in many parts of the UK, more estates are being pulled into inheritance tax than in previous decades.

AJ Bell's Charlene Young summed it up well: "Frozen tax thresholds punish taxpayers by stealth. When asset prices and wages rise but thresholds fail to track inflation, the result is higher tax bills."

What to do: If you're close to a tax band threshold — particularly the £50,270 higher rate threshold — it's worth looking at pension contributions to bring your taxable income down. Every pound you put into your pension is tax-relieved at your marginal rate. A higher-rate taxpayer contributing £1,000 to their pension effectively gets £400 back from HMRC. Also worth checking: your tax code. An incorrect code could mean you're overpaying or underpaying tax. You can check yours on your HMRC personal tax account.

What's Changing for Investors and Dividend Income

From 6 April 2026, dividend tax rates rose by two percentage points:

This change will hit owner-managed business directors particularly hard. Many limited company directors pay themselves a combination of salary (at or below the personal allowance) and dividends to be tax-efficient. With the dividend rate now higher, the savings compared to just taking a salary are smaller than they used to be.

Also changing for investors: income tax relief on Venture Capital Trusts (VCTs) is being cut from 30% to 20%. VCTs are higher-risk investments in small companies, and the 30% upfront tax relief was a big part of their appeal. With the relief cut, new investment in VCTs is likely to fall.

What to do: If you hold dividend-paying shares or funds outside an ISA, this is a strong nudge to move them into your Stocks and Shares ISA. You have a £20,000 ISA allowance each tax year, and dividends received inside an ISA are completely tax-free — no dividend tax, no matter how much you receive. Prioritise moving high-yield holdings across first.

Making Tax Digital: Now Mandatory for Higher Earners

From 6 April 2026, Making Tax Digital (MTD) for Income Tax is now mandatory for sole traders and landlords with gross annual trading or rental income above £50,000. This is the first phase of a three-year rollout:

• April 2026: Gross income above £50,000
• April 2027: Gross income above £30,000
• April 2028: Gross income above £20,000

HMRC is not providing its own free software — you'll need to use a commercial product. Options include QuickBooks, Xero, FreeAgent and a range of others. Some have free tiers; most charge a monthly subscription (typically £10–£30/month).

What to do: If your turnover is above £50,000, you should already be using MTD-compatible software. If you haven't set this up, do it now — HMRC started enforcement from April 2026. If you're below £50,000 for now, get prepared anyway; the threshold drops to £30,000 from April 2027.

Working From Home Tax Relief: Abolished from 6 April

This one flew under the radar but will hit remote workers in the wallet. From 6 April 2026, HMRC scrapped the working from home tax relief for employees.

Previously, employees who worked from home and weren't reimbursed by their employer could claim a flat-rate deduction of £6 per week — giving a basic-rate taxpayer a saving of roughly £62 per year, and a higher-rate taxpayer around £124 per year. It was a small but real benefit introduced during the pandemic.

That relief is now gone for employees. You can still claim it if you're self-employed and working from home — but if you're on PAYE, it's over.

TV Licence and Other Household Changes

A few smaller changes worth noting:

A colour TV licence rose from £174.50 to £180 per year from 1 April 2026 — up £5.50. Calculated against the BBC's annual inflation-linked formula. A black-and-white licence rises from £58.50 to £60.50. If you don't watch live TV or use BBC iPlayer, you legally don't need a licence — it's worth checking if yours is necessary.

Statutory sick pay increased from £118.75 to £123.25 per week from April 2026. You must earn at least £125 per week before tax to qualify.

Universal Credit rose by 6.2% from 1 April 2026. The standard allowance for a single person under 25 went from £316.98 to £338.58 per month, and for couples under 25 from £497.55 to £528.34 per month. The two-child benefit cap was also abolished from April 2026, meaning families with three or more children can now claim child element payments for all their children — worth up to £4,560 per year for the families affected.

Car tax (Vehicle Excise Duty) for standard petrol and diesel cars rose from £195 to £200 per year from April 2026. Electric vehicle owners who previously paid nothing now face a small fee for the first time.

Frequently Asked Questions

Q: How much more will I pay overall in April 2026 compared to last year? A: It depends on your situation, but a typical household will save around £117 on energy bills while paying around £114 more in council tax, £33 more on water, and small increases on TV licence and car tax. On balance, most households will be roughly flat or slightly worse off — and that's before factoring in broadband mid-contract price rises that are affecting many people at the same time.

Q: Has the ISA allowance changed in April 2026? A: No. The ISA allowance remains at £20,000 for the 2026/27 tax year. You can split this across Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs and a Lifetime ISA (capped at £4,000 for the Lifetime ISA). The Cash ISA allowance is currently under review — there have been proposals to cut it to £12,000 from April 2027 for under-65s, but final rules haven't been confirmed yet.

Q: I'm a landlord with a rental income of £55,000. What does Making Tax Digital mean for me? A: From 6 April 2026, you must keep digital records of your rental income and expenses using MTD-compatible software, and submit four quarterly updates to HMRC each year plus a final annual declaration. You'll need to sign up for MTD through your HMRC online account and choose approved software — HMRC's own website lists compatible providers. Penalties for non-compliance haven't been widely enforced yet as HMRC gets the system up and running, but don't rely on that.

Q: I take dividends from my limited company. How much more tax will I pay from April 2026? A: Basic-rate taxpayers on dividends will pay 10.75% instead of 8.75% — a 2 percentage point rise. On £20,000 of dividends above the £500 allowance, that's an extra £390 per year. Higher-rate taxpayers face the same 2pp rise, from 33.75% to 35.75% — on £20,000 of dividends, that's an extra £400. The most effective mitigation is to draw dividends from within an ISA wrapper wherever possible.

Q: The working from home tax relief has ended — can I claim anything else? A: If you're an employee, you can no longer claim the flat-rate £6/week WFH deduction. However, if your employer reimburses you for home office costs (broadband upgrades, a chair, a monitor), those reimbursements can still be tax-free up to certain limits. If you're self-employed, you can still claim a proportion of your home running costs as a business expense using the simplified flat-rate method or actual costs method. Speak to an accountant if you're unsure what you can legitimately deduct.

What to Do Right Now

The start of a new tax year is a good prompt to run through a quick financial health check. Here's a short list of things worth doing this month:

Check your tax code on your HMRC personal tax account — an incorrect code is common and costs you money either way.

If you're a basic or higher-rate taxpayer with dividend-paying investments outside an ISA, consider moving them into your 2026/27 Stocks and Shares ISA allowance. You have £20,000 to use and it resets every April.

If you're on a variable energy tariff, it's worth comparing fixed deals now — the price cap is low but expected to rise again in July.

If you're a sole trader or landlord earning above £50,000, get MTD-compatible software set up immediately if you haven't already.

Check your council tax bill — and if you live alone, are a student, or are on a low income, check whether you're entitled to a discount or reduction you're not currently claiming.