Here are all the major financial changes and deadlines taking effect this month
Here we explain all the major financial changes and deadlines over the next four weeks and how they will affect you.
What are the financial changes in May?
Rising interest rates
Interest rates are expected to rise from 0.75% to 1% this Thursday, May 5.
The increase would be the highest level in 13 years as the Bank of England struggles to bring down inflation which hit a new 30-year high in March of 7%.
Inflation is expected to reach 8% later this year.
The base rate is what the BoE charges other banks and lenders – it affects what you are charged if you borrow money and how much interest you get back on your savings.
For those with a mortgage, if you have a fixed rate agreement, your rates will not change if interest rates are increased.
If you are on a trailing mortgage and interest rates are increased, your rates will increase as they align with the base rate.
Those with a standard variable rate mortgage (SVR) may see rates increase, as it will be up to your lender to decide whether or not to pass on the increase.
For savers, interest rate hikes are usually good news because it means you could see a higher return on your money – if you have a variable rate account.
However, there is no guarantee that banks and lenders will move in line with any rise.
Some may also take time to announce any changes.
Up to 2.6 million people with old-style legacy benefits are expected to switch to Universal Credit from May 9.
This process had been halted due to Covid – but the government wants everyone transferred by the end of 2024.
People will start receiving a “migration notice” in the coming months.
There will be a three month time limit to claim Universal Credit or your benefits will be stopped.
Only around 500 people will be transferred to Universal Credit initially, but the Department for Work and Pensions (DWP) will pick up the pace after a few months.
The persons concerned are social recipients who receive the following payments:
- Work Tax Credit
- Child tax credit
- Income-Based Jobseeker’s Allowance
- Income support
- Employment and Income Support Benefit
- Housing allowance
If you’re applying for the benefits above and want to switch to Universal Credit right away, you can apply to transfer now.
But it is advisable to do your research first.
Officials say 55% will be better off with Universal Credit, but some will be worse off in the long run.
You can’t go back to old-school perks once you’re on Universal Credit.
Residence tax refund
Municipal tax refunds worth £150 began trickling into the bank accounts of thousands of eligible households from last month.
However, not everyone has yet received payment.
Some households have to wait months for the £150 to hit their account, even as late as September.
Councils officially have until September 30 to issue the money.
Some councils expect payments to start in May.
Those who pay council tax by direct debit will receive payments first, as councils already have their details on the system.
Council tax rebate will apply to homes in tax brackets A, B, C or D in England and Wales – around 80% of properties.
It will not apply to those living in municipal tax brackets E, F, G and H (or me too, in Wales).
Scottish residents will also be eligible for a £150 reduction if they are in bands A to D – and will also be eligible if they are also in receipt of a council tax reduction.
The price of heaven is rising
Sky landline customers have seen the cost of a call with Sky Talk on a home phone increase by 10% since the start of May.
You now pay 22p per minute, up from 20p, to talk to family and friends.
This applies to Pay As You Talk customers making outbound calls to mobile and home phone numbers.
International calls may be charged at different rates, depending on your tariff.
You might want to consider looking for a cheaper deal if you’re unhappy with the price increases.
Another option is to consider haggling with Sky, if you don’t want to leave but want to lower your monthly bill.
Sky will also bring back EU roaming charges from May 3.
It will cost £2 a day for holidaymakers using mobile data, making calls and texting outside the UK.
Tesco Club Card
Tesco shoppers have just weeks left to redeem £17million of unspent Clubcard vouchers before they expire in May.
The supermarket said vouchers must be redeemed by May 31, 2022.
To get Tesco vouchers through its Clubcard loyalty program, customers must accumulate points by spending money in stores.
Shoppers get one point for every £1 spent in-store and online, or one point for every £2 spent on fuel.
Voxi introduces roaming charges in the EU
Voxi, a sub-brand of Vodafone, is introducing mobile roaming charges for new and existing customers holidaying in Europe from May 27.
Customers will need to buy a European roaming pass to make calls, send texts and use data in 49 European countries and destinations.
- £2 for a day pass
- £4 for a two-day pass
- £8 for an eight-day pass
- £15 for a 15 day pass
Roaming passes will also include unlimited texting and minutes, even if that’s not what your UK Sim usually offers.