State pensions and benefits rise; child benefit cap lifted; six tax changes kick in

Millions of people across the UK will see increases in pensions and benefits from today, alongside a series of tax changes taking effect with the start of the new financial year.

One of the most significant updates is the removal of the two-child benefit cap, allowing eligible families to claim support for all their children under Universal Credit. Payments have also been increased, with families now receiving higher monthly amounts per child.

State pension payments have risen by 4.8% under the triple lock system, meaning pensioners will receive more each week. Other benefits, including Universal Credit, disability allowances, and carer’s support, have also been adjusted upwards in line with inflation or policy changes.

For example, single individuals aged 25 and above will now receive higher monthly Universal Credit payments, while child benefit and disability-related support have also been increased to reflect the rising cost of living.

However, not all changes bring financial relief. Several tax reforms have also come into force. Self-employed individuals and landlords earning above a certain threshold are now required to comply with the Making Tax Digital system, submitting more frequent financial updates to tax authorities.

Dividend tax rates have increased, while capital gains tax on certain business assets has also gone up, meaning investors and entrepreneurs may face higher tax bills. Additionally, tax relief for people working from home has been removed.

Changes to inheritance tax rules have introduced a new cap for agricultural and business property relief, while existing thresholds for other estates remain frozen until 2030.

Meanwhile, adjustments to Universal Credit for people with health conditions mean some new claimants could receive lower payments depending on their assessment.

Overall, the new financial year brings a mix of higher benefit payments and increased tax obligations, with the government aiming to balance cost-of-living support with broader fiscal reforms.