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The inflation rate in Britain, as measured by the consumer price index, fell to 4.6% for the 12 months leading up to October. This is the lowest it has been in nearly two years. This achievement is ahead of the government’s goal to reduce it from 10.7% in late 2022, and can be attributed to the decline in energy prices.
Nevertheless, it still exceeds the desired 2% target set by the Bank of England, resulting in expensive goods and services and adding strain on households during the upcoming holiday season.
As the temperature drops, people turn up their radiators to stay warm. Meanwhile, the holiday season requires more money to be spent on food, drinks, presents, decorations, and travel. This can be challenging for many, especially since the Joseph Rowntree Foundation found that 2 million households in the UK have had to unplug their fridge or freezer in order to keep their bills manageable. The foundation has also expressed concern about the alarming levels of financial struggle.
The JRF’s research discovered that 2.8 million individuals had accumulated debt in order to afford food. Additionally, one out of every six participants in their survey reported being forced to rely on a community “warm room” instead of using electricity at home. This serves as further proof that the ongoing cost of living crisis is having a significant impact.
According to Peter Matejic, the main analyst at the foundation, low-income families are not seeing any improvement in their financial situation, despite a decrease in inflation.
“Numerous individuals are resorting to borrowing money to cover their food expenses, selling their possessions, and seeking assistance from charity organizations in order to survive financially.”
The autumn statement by Chancellor Jeremy Hunt included a strengthening of benefits and a significant rise in the state pension. Additionally, he outlined stricter measures for certain individuals receiving welfare.
This is a summary of the state’s financial aid for low-income families during the winter season. It includes the expected payment dates for those who receive benefits, despite the chaos and disruptions of the holiday season.
Holiday dates affecting benefits
Typically, government assistance in the form of benefits and retirement payments will be distributed as usual in December. However, due to the bank holidays on Christmas Day, Boxing Day, and New Year’s Day, the delivery dates will be altered.
If you are anticipating to receive payments from the Department for Work and Pensions (DWP) on December 23, 24, 25, or 26, you will now receive them on December 22. Similarly, if your payments were scheduled for December 30, 31, or January 1, you will receive them on December 29 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 about the timing and disbursement of state benefits, please check the official government website.
The upcoming support payment will be received in the spring season.
Despite the expiration of Rishi Sunak’s Energy Bill Support Scheme at the end of March this year (an initiative that handed out £400 in monthly instalments of £66 and £67), millions of people on low incomes will receive further cost of living support from the government worth up to £1,350 in total this calendar year.
The Department of Work and Pensions (DWP) has announced that eight million individuals who qualify for means-tested benefits, such as universal credit, pension credit, and tax credits, will receive a £300 payment in three separate installments. This program began in the spring and the money will be deposited directly into their bank accounts.
The total amount of payments will be £900.
Over six million individuals with disabilities have already received a separate payment of £150, while an additional £300 will be given to over eight million pensioners this winter.
The currently announced payment windows are listed below, and more specific dates for the final installments are anticipated to be released soon:
The initial cost of living payment of £301 was already 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 payment of £150 for disability will be issued from 20 June to 4 July.
The second cost of living payment of £300 will be issued to most individuals between 31 October and 19 November.
- £300 – Pensioner payment – November 2023
The cost of living payment during spring 2024 will be £299.
The projected Energy Price Cap is expected to decline even more in the upcoming year.
The unpleasant, rainy conditions we encountered in November caused a decrease in temperatures and signaled the need to turn on the central heating sooner rather than later. This brought back unpleasant memories from last year when household heating expenses were a major worry throughout the winter season.
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.
During this time period, there was a significant decrease of 17% from £3,280 in the second quarter to £2,074 in the third quarter. As a result, the average consumer went back to paying the standard rate set by the cap. This also caused the EPG to increase to £3,000, but it was considered a minor issue for most people.
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 recent decrease in prices reflects the recent decrease in wholesale energy costs, which is the amount energy companies pay for their electricity and gas before selling it to households. Although this is a significant drop from the extremely high rates of the past two years, prices still remain nearly £1,000 higher than before the pandemic.
According to analysts at Cornwall Insight, the next EPC announcement for the second quarter of next year is expected to result in a decrease, with the average annual bill projected to be £1,816.46.
The predictor is anticipating a subsequent decrease followed by a small increase in the third and fourth quarters.
Overall, the situation appears much more stable now compared to a year ago, when the effects of Russia’s conflict in Ukraine were first impacting global markets.
Warm Home Discount returns
As the days grow shorter, there is positive news regarding household energy expenses. The government’s Warm Home Discount program, initially established in 2011, will provide a £150 reduction on electricity and gas bills for eligible recipients.
You will receive a single discount on your bill from early October 2023 to March 31, 2024. You may qualify for this program if you receive the guarantee credit portion of pension credit or if you have a low income and significant energy expenses.
More information on eligibility for the Warm Home Discount can be found here.