April can be a time of financial opportunity and challenges. The new financial year begins on 6 April, bringing a fresh set of allowances – potentially helping you save on tax. However, the new tax year can also bring different tax thresholds and deductions, potentially increasing outgoings or take-home pay.
In this guide, our financial advisers explain some of the key factors behind “Awful April” in the UK, how they can affect you, and ideas to mitigate negative effects. We hope these insights are helpful. Please contact us if you want to discuss your financial plan with a member of our team.
What is Awful April?
In 2025, April has been dubbed “Awful April” by journalists to describe the convergence of rising household bills (e.g. utilities). The average household bill for gas and electricity is rising by £111 to £1,849 per year, and water bills are set to increase by £10 more per month.
Historically, April is a time when energy companies adjust rates, particularly when the Ofgem price cap changes. This occurred on 1 April, when the cap rose by 6.4%. Meanwhile, most local authorities in England are hiking council tax by 4.99% (the maximum allowed).
Employers have not been spared either. Now, in 2025-26, employer National Insurance (NI) contributions will be 15% instead of 13.8%. This higher tax is expected to affect around 1.2 million employers, with 940,000 experiencing an increase in liability for secondary Class 1 NICs.
More positively, the National Living Wage (NLW) has risen by 6.7%, from £11.44 to £12.21 per hour. However, opposition critics – led by Conservative leader Kemi Badenoch – have argued that much of this benefit will effectively be wiped out by the “jobs tax” on employers – potentially costing families £3,536 over the course of this Parliament.
Impact on Households
Unfortunately, many families are likely to experience a “stealth pay cut” in April, where wages stay the same (or increase slightly), but costs go up disproportionately.
For instance, the UK public sector usually experiences a pay rise in April. Over 3m workers just received a boost to their paycheque. However, income tax thresholds have stayed the same.
The result is “fiscal drag”, where millions of people are dragged into higher tax brackets (often without realising). This is expected to affect 4.1m extra people by 2027-28.
Simultaneously, households are facing higher costs which cannot easily be avoided. Rail fares recently climbed by 4.6%, and the TV licence fee has risen to £174.50. Other broadcasters like Sky have also hiked prices by as much as 6.2%.
The overall picture is a reduction in disposable income for many people. This comes at the worst time for many households still recovering from winter bills or spring holidays like Easter.
What can I do?
Due to the converging challenges, April is the perfect time to revisit monthly income and outgoings. Update your budget apps or spreadsheets with any new council tax, energy or subscription rates. Identify discretionary expenses (e.g. takeaways, streaming services or unused memberships) and trim where possible.
However, also consider how you can use the new tax year to your advantage. For instance, check your tax code to ensure you’re not overpaying (HMRC took £5.8bn in overpayments in 2024). Maximise your ISA contributions early if possible – especially since there are hints the Chancellor could reduce the Cash ISA limit later in the year.
If you have recently received a pay rise and appear set to enter a higher tax threshold, consider pension salary sacrifice. This reduces taxable income while boosting retirement savings. Speak with a financial adviser to explore this option in greater detail.
For Council Tax, see if you are eligible for discounts or exemptions (e.g. single person discount, low income reduction, or student exemptions). Council Tax is typically paid in 10 monthly instalments from 1 April to 1 January, but some people might benefit from a monthly plan to spread payments across 12 months.
For higher earners or those with complex finances, it’s wise to review portfolio allocations, pension contributions and tax efficiency with a financial adviser.
Invitation
If you want to ensure you’re taking the right steps to safeguard your financial future, please get in touch. We’d love to discuss your goals with you!
Please note:
Your capital is at risk. Investments can go down as well as up. Past performance is not indicative of future results. Tax treatment depends on individual circumstances and may change. This content is for information only and not investment advice. Any decision to invest is the reader’s own. Diversification is key to managing risk. Market volatility affects investment values. Inflation erodes savings. Liquidity risks may prevent quick access to funds.
