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UK pensions tax changes to bring in ‘more than £40bn’ before 2045
Water bills to rise by £10 a month in April
Starting from April 2025, households in England and Wales will see their monthly water bills increase by an average of £10. This price hike will raise the average annual bill by £123 to £603, though there will be significant regional variations.
At the same time, the UK water regulator, Ofwat, has outlined expected bill increases over the next five years. However, following standard practice, inflation has not been factored in. The regulator has also pledged additional investment in infrastructure, such as reservoirs, and more support for customers facing potential water supply security issues.
The extent of the water bill increases across England and Wales will vary depending on the supplier—
- Households served by Southern Water will see their annual water bills rise to £703, a 47% increase.
- Hafren Dyfrdwy and South West Water customers will face a 32% rise.
- Thames Water, which supplies millions of households, has confirmed a 31% increase in bills, while Yorkshire Water customers will see a 29% rise.
Other factors, such as whether customers use a water meter and their actual consumption, will also influence bill changes, meaning the impact will vary greatly from household to household. Consumer groups have warned that these increases could push more families into the cost-of-living crisis.
The Consumer Council for Water (CCW) stated that this is the largest water bill hike since the industry’s privatisation 36 years ago. Currently, around 2.5 million households are already in debt to their water suppliers.
David Black, Chief Executive of Ofwat, said:”We have urged water companies to double the level of financial support available to households over the next five years.” He also emphasised that despite rising water bills, the approved £104 billion investment over the next five years will be used to improve sewage treatment in rivers and seas and help secure long-term drinking water supplies for customers.Earlier this week, it was also reported that water bills in Scotland will rise by nearly 10% from April.
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UK pensions tax changes to bring in ‘more than £40bn’ before 2045
Latest estimates reveal that following the 2015 UK pension reforms, the Treasury is set to receive more than £40 billion in “windfall” revenue over the next 20 years.
Although the government projects that pension tax changes will generate an additional £1.46 billion annually by 2029/30, actuarial consultancy Lane Clark & Peacock estimates that this figure will surge to over £3 billion per year by the mid-2040s.
This sharp increase in revenue is largely due to a surge in pension transfers in recent years. In 2015, then-Chancellor George Osborne introduced the Pension Freedom Reforms, granting individuals the right to transfer their Defined Benefit (DB) pensions into Defined Contribution (DC) schemes.
The policy aimed to provide retirees with greater financial flexibility, allowing them to convert traditional DB pensions—typically offering a guaranteed lifetime income—into DC pensions, giving them more control over their retirement savings.
However, the reform also sparked concerns over increased investment risk, potential fraud, and reduced retirement income security.
According to the Financial Conduct Authority, between April 2015 and September 2018 alone, over 170,000 people transferred their DB pensions into DC schemes, with an average transfer value exceeding £350,000. The total value of these transfers surpassed £50 billion, with many individuals making these transfers to pass on pension wealth to the next generation.
As a result, in last year’s budget, Chancellor Rachel Reeves announced that unused pensions will be subject to inheritance tax from April 2027. It is estimated that 66,600 people will pay inheritance tax in 2029/30, up from 40,100 this tax year.
Shaun Moore, a tax and financial planning expert at wealth management firm Quilter, noted that freezing the inheritance tax threshold until 2030, combined with the inclusion of pensions from 2027, will allow the government to “capitalise on an expanding taxpayer base” to boost tax revenues.
Since 2009, the inheritance tax-free threshold has remained at £325,000. The combination of a frozen threshold, inflation, and rising asset values means that more people are being pushed into paying inheritance tax, a trend that is likely to continue.
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Tax and duty increases lead to higher prices for wine and spirits
The price of wine and spirits in the UK has risen from 1st February, following a 3.6% increase in alcohol duty, in line with the Retail Price Index inflation measure. In addition, certain alcoholic beverages now face higher duty rates based on their alcohol content.
Under the new changes, duty on a 14.5% ABV bottle of red wine has increased by 54p, while duty on a bottle of gin has gone up by 32p. However, duty on draught beer has been reduced by 1.7%, marking the first cut in a decade—equivalent to a 1p reduction per pint of standard-strength beer.
The Wine and Spirit Trade Association (WSTA) stated that these changes mean the duty on a 14.5% ABV bottle of red wine has risen by 98p over the past 18 months. The association criticised the system, saying: “Under the UK’s harsh alcohol duty regime, there are no winners—higher tax rates mean consumers pay more, leading to lower sales, harming businesses, and ultimately reducing Treasury revenue.”
In response, a Treasury spokesperson defended the reform, stating: “Alcohol duty changes modernise and simplify the tax system, prioritise public health, and encourage lower-alcohol consumption.”
Alongside the draught beer duty cut, the government has also expanded relief for small producers of alcoholic drinks under 8.5% ABV, meaning tax reductions will gradually decrease as production volumes increase.
Despite the Treasury’s claim that these measures will “support industry growth”, critics argue that other changes in the Autumn Budget—including higher Employer National Insurance Contributions (NICs) and an increase in the National Minimum Wage—will push up the cost of beer, with pubs passing on the extra costs to customers.
Some pub landlords have warned that rising employment costs could result in beer prices increasing by 30p to 40p per pint.
