Receive the Morning Headlines email at no cost to stay updated on news from our journalists around the globe.
Join our mailing list for daily news updates
Register for our complimentary daily email newsletter, “Morning Headlines.” Stay informed with our daily news updates by signing up for our mailing list.
The UK’s inflation rate, measured by the consumer price index, decreased to 4.6% in the 12 months leading up to October. This is the lowest it has been in nearly two years and shows that the government’s goal of reducing it from 10.7% in late 2022 has been met much earlier than expected, mainly due to a decrease in energy prices.
Nevertheless, it remains significantly higher than the desired 2 per cent target set by the Bank of England, resulting in elevated prices of goods and services and placing strain on households during the approaching holiday season.
As temperatures drop, people turn up their radiators to keep warm. However, the holiday season also brings a rise in expenses for food, drinks, gifts, decorations, and travel. This can be especially difficult for those already struggling financially. According to the Joseph Rowntree Foundation, about 2 million households in the UK have had to resort to unplugging their fridge or freezer in order to save on their bills. This is a concerning level of hardship.
The JRF’s study revealed that 2.8 million individuals had accrued debt in order to cover their food expenses. Additionally, one out of every six participants in the survey reported being forced to rely on a community “warm room” instead of using electricity at home, highlighting the ongoing struggle of the cost of living crisis.
According to Peter Matejic, the chief analyst for the foundation, the situation for low-income families is not improving despite a decrease in inflation.
Numerous individuals are resorting to taking out loans in order to cover the cost of food, as well as selling their possessions and seeking assistance from food banks in order to make ends meet.
In his autumn statement, Chancellor Jeremy Hunt announced an increase in benefits and a significant raise in the state pension. He also outlined stricter measures against certain individuals receiving welfare.
This is a quick summary of the financial assistance provided by the state for low-income families during the winter season. It also includes the payment dates for those who qualify for benefits, despite the busy and unpredictable Christmas season.
Holiday dates affecting benefit schedule.
The typical government assistance in the form of benefits and pension payments will still be distributed in December. However, due to Christmas, Boxing Day, and New Year’s Day falling on bank holidays, the dates of delivery will be altered.
Those who are anticipating payments from the Department for Work and Pensions (DWP) on December 23rd, 24th, 25th, or 26th will receive their money on December 22nd instead. Those expecting payments on December 30th, 31st, or January 1st will receive it on December 29th instead.
- Universal Credit
- State pension
- Pension credit
- Disability living allowance
- Personal independence payment
- Attendance allowance
- Carer’s allowance
- Employment support allowance
- Income support
- Jobseeker’s allowance
To learn more about the timing and process of receiving state benefits, please refer to the government’s official website.
The upcoming spring will bring the next installment of support payment.
Even though the Energy Bill Support Scheme, which provided monthly payments of £66 and £67, ended in March, people with low incomes can still receive up to £1,350 in financial assistance from the government this year.
The Department for Work and Pensions (DWP) has announced that approximately eight million individuals who qualify for means-tested benefits, such as universal credit, pension credit, and tax credits, will soon receive the next payment of £300 towards the cost of living. This payment will be distributed in three parts and will be directly deposited into recipients’ bank accounts, following a program that started earlier this year.
The total amount of payments will be £900.
An additional £150 has been distributed to over six million individuals with disabilities, while an additional £300 will be given to over eight million pensioners this winter.
These are the payment deadlines that have been officially announced, and more specific dates for the last payments are expected to be released soon.
The initial cost of living payment of £301 has been distributed from 25 April to 17 May (or from 2 to 9 May for individuals receiving tax credits but not other low-income benefits).
A sum of £150 was allocated for disability support, distributed from June 20th to July 4th.
The second cost of living payment of £300 will be issued to most individuals between October 31st and November 19th.
- £300 – Pensioner payment – November 2023
The third cost of living payment, totaling £299, will be issued in spring 2024.
The projected Energy Price Cap is expected to decline even more in the upcoming year.
The unpleasant, rainy conditions we faced in November caused a decrease in temperatures and forced us to turn on the central heating sooner than expected, bringing back unpleasant memories of last year when high heating bills were a major worry during the winter months.
However, the energy crisis that drove up electricity and gas prices a year ago has largely been brought under control and the government’s Energy Price Guarantee (EPG) – introduced by short-lived prime minister Liz Truss in September 2022 to ensure households paid no more than £2,500 for their power, with the government subsidising the remainder owed to providers under Ofgem’s Energy Price Cap (EPC) – finally fell into irrelevance when the cap dropped below £2,500 in July.
In the third quarter, there was a significant drop of 17% from £3,280 to £2,074, causing the average consumer to resume paying the standard cap rate. This also resulted in a rise in the EPG to £3,000, which was considered a minor technicality for most.
Ofgem has since announced that the EPC has been set at £1,923 for the final quarter of this year (or £1,949 for those on pre-payment plans) and will then rise slightly to £1,928 (or £1,960 for pre-payment) for the first quarter of 2024.
The decrease in prices is a result of the recent decrease in wholesale energy prices, which is what energy companies pay for their electricity and gas before providing it to consumers. Despite being significantly lower than the high rates of the past two years, the current figure is still almost £1,000 higher than pre-pandemic levels.
According to analysts at Cornwall Insight, there is a possibility of a decline in the next EPC announcement for the second quarter of next year. They predict that the average annual bill will decrease to £1,816.46 at that time.
The predictor is forecasting a subsequent decrease followed by a small increase in the third and fourth quarters.
Overall, the situation appears much more secure now than it did a year ago, when the impact of Russia’s conflict in Ukraine was first being observed in international markets.
The Warm Home Discount is being refunded.
As the days get shorter and the cold weather approaches, there is some positive news for household energy bills. The government’s Warm Home Discount scheme, which was initially implemented in 2011, will once again offer a £150 reduction on domestic electricity and gas bills for those who meet the eligibility requirements.
You will receive a single discount automatically applied to your bill from early October 2023 to 31 March 2024. You may qualify for this offer if you receive the guarantee credit portion of pension credit or if you have a low income and high energy expenses.
For additional information on eligibility for the Warm Home Discount, please refer to our website.