Council Tax, energy, water bills, State Pension: big money changes for the 2025/26 financial year

Council Tax, energy, water bills, State Pension: big money changes for the 2025/26 financial year

April will mark the start of the new tax year, making it an important time for our money.

And there are major changes on the horizon that will have a big impact on our financial health, both good and bad.

State Pension: up by 4.1%

For most retired households, the rate of the State Pension is a key concern every tax year.

This is where the triple lock comes in.

Introduced in 2011, this system ensures that annual payments go up in line with inflation, wage growth or by 2.5% – whichever is higher.

As a result, the Full New State Pension will increase by £362.65 in April.

Luckily for retirees, the chancellor didn’t touch the triple lock during her recent Spring Statement.

For more on the State Pension, check out our guide. 

Council Tax rise: 4.99% for most

Many of us will have to fork out almost 5% more on our Council Tax each month.

Under current rules, most councils can hike bills by 4.99% every year, with larger increases requiring a referendum.

In a quirk of the system, however, councils facing bankruptcy can introduce larger rises.

As of 2025/26, Bradford Council will increase bills by 10% and residents of Newham and Maidenhead face a 9% rise.

How some can save

You may be able to reduce your bill by looking into discount schemes and benefits.

For instance, those living alone normally qualify for a 25% discount.

Similarly, owners of vacant properties could be eligible for a reduction.

Check out our explanation of how Council Tax works and how to potentially reduce the size of your bill.

Stamp Duty changes: bigger tax bills for homebuyers

The temporary changes announced by the Government in 2022 to support the housing market during the pandemic will come to an end on 1 April.

The headline change is that the tax-free threshold will fall from £425,000 to £300,000 for first-time buyers and £250,000 to £125,000 for other homebuyers. 

You can read the full breakdown of changes on this Government page.

Energy costs: soaring again

With heightened geopolitical tensions and the war between Russia and Ukraine raging on, it’s no surprise that energy prices are escalating.

Regulator Ofgem has raised the Price Cap (the maximum you pay per unit of energy) by 6.4% for April to June 2025.

The typical annual energy bill is expected to increase to £1,849 per year.

While prices are forecast to fall in the Summer, they're expected to rise once again as we hit the high usage months towards the end of the year

How to save

As well as regularly reviewing your tariff to see if you could cut costs by switching to a fixed-rate deal, consider improving your energy-saving habits.

For example, experts recommend that taking a four-minute shower could save your household £95 per year.

Drying clothes with a tumble dryer also drains electricity.

Hanging the washing out and drying it naturally could help you save massively.

loveMONEY comment: lock into a fixed energy deal NOW or be stuck overpaying for the next year

Rising supermarket bills?

During her inaugural Budget, Chancellor Rachel Reeves announced a 1.2% increase in National Insurance (NI) payments for employers, with the heads of several major supermarket chains lashing out against the move.

Sainsbury’s chief Simon Roberts claimed the supermarket's costs will soar by £140 million, while M&S has also said that its bill will increase by £60 million.

It seems likely that supermarkets will pass these costs onto customers.

Alarmingly, food inflation is already at 3.3%, according to the latest data from the Office for National Statistics.

Want to cut costs? Check out our weekly list of top supermarket deals.

TV licence: rising  to £174.50

Even something as simple as watching TV will get a little costlier from April.

A TV licence will increase by £5 to £174.50 this year.

However, there is good news for some older people.

If you're 75 or over and receive Pension Credit, or if you live with a partner who is eligible, you qualify for a free TV licence.

Likewise, anyone registered blind can receive a 50% discount.

You are also eligible if you live with someone who is registered as blind.

Broadband: 6-7% hikes

A host of providers are increasing their bills by 6-7% next month.

This equates to a fixed rate of £3 £3.50, depending on when your contract began.

As USwitch reports, Virgin Media will hike prices by 7.5%, while BT is increasing bills by 6.4% from April.

The ultimate guide to switching broadband deals and saving money

Water bills: up £123

Water bills are also set to jump, with the typical bill increasing by 26% (£123 annually or approximately £10 a month).

According to research reported in the Metro, however, customers of Southern Water will experience an even larger increase of 47%.

Meanwhile, South West Water users will see their bills rise by 32%.

How to save

Simple steps such as taking a shower rather than a bath, turning off the tap when brushing your teeth and fixing leaky taps can have a huge impact on bills.

Most water companies also provide gadgets to help you cut your usage.

Many are free, so be sure to check your provider’s website.

Bill shock: a hidden toilet leak caused my water bill to double – how to know if your loo is leaking

Road tax: doubling for some drivers

Under plans announced in the Autumn Budget, 59 cars will be hit by a huge spike in road tax – formally known as Vehicle Excise Duty (VED).

As a result, many drivers will see their annual bills double from £2,745 to £5,490.

Cars affected by the chancellor’s move tend to be high-end models, emitting more than 255g/km of CO2.

This includes Bentley, Alfa Romeo, Audi and BMW.

Have your say

What do you think of the price hikes on the cards?

Do you feel they are fair, or are there any that really get your goat?

We’d love to hear your thoughts in the comments below.