Tax Year 2020/2021: Changes you need to know about | Personal Finance | Finance

A new tax year often means a change in the finances of many people across the country. Benefit amounts can fluctuate, and contributions can also change according to government policy. Amid the coronavirus crisis, many people are attempting to gain a better understanding of their finances.

These include Universal Credit, Child Tax Credits, Working Tax Credits and Housing Benefit among others.

From the start of the new tax year, these benefits have been given a widely welcomed 1.7 percent boost.

Universal Credit, which many more Britons have become entitled to during the coronavirus crisis, is to undergo change as a result of both the pandemic and the new tax year.

A £1,000 per year boost has been given to the standard Universal Credit allowance in addition to the new tax year rise. 

READ MORE: What state pension am I entitled to? How to check your forecast

National Insurance payments are provided to the government by workers over the age of 16.

However, the threshold on which people start paying the contribution has recently risen from £8,632 to £9,500.

This means any earnings above this amount are subject to 12 percent National Insurance contributions.

And the Institute for Fiscal Studies has estimated this could be a saving of £120 per year on average for British households.

The new tax year has also seen a significant rise in the State Pension.

Because of the triple lock system, which sees the benefit rise in line with inflation, average earnings or 2.5 percent – whichever is the highest – the State Pension has received a boost.

The new tax year saw the benefit rise by 3.9 percent in line with average earnings. 

This means a bumper increase of £343 across the tax year, with the pension amount rising from £8,767.20 to £9,110.40.

The full rate New State Pension figure now stands at £175.20 a week.

Whereas the Old State Pension in Category A or B has increased to £134.25 per week.

Prime Minister Boris Johnson and his new chancellor Rishi Sunak have pledged many spending commitments as part of their five-year strategy. 

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