Tag: cost of living support

Eight million households to receive £2.5 billion Cost of Living support

From today low-income households will start to receive the third and final Cost of Living Payment worth £299

  • Payments are part of the £104 billion Cost of Living support which includes uprating benefits by 6.7% and pensions by 8.5%
  • Comes as more people are set to secure long-term financial security through work thanks to the next generation of welfare reforms 

Millions of households across the UK will start to receive a £299 Cost of Living Payment from today until 22 February as part of the Government’s £104 billion Cost of Living support package.

The payment will be sent out automatically and recipients do not need to apply to receive it. This includes tax credits-only customers who will receive the payment from HMRC between 16 and 22 February.

It is the third of up to three payments totalling up to £900 paid to eligible households on means-tested benefits over 2023/24 and comes as part of a support package that has helped millions of households since autumn 2021.

Our economy has turned a corner, and we are moving away from the big government, high spending, high borrowing, and high tax approach that was necessary before, and focusing on the long-term decisions required to strengthen our economy and give people the opportunity to build a wealthier, more secure life for themselves and their family.

This includes sticking to the plan to keep inflation down – which has already more than halved – and cutting taxes for hard working people to help them keep more of what they earn and drive down the Cost of Living. 

The government says supporting people into well paid jobs is the best way to help people out of poverty and to give people long term financial independence. That’s why we’re introducing the next generation of welfare reforms, including unprecedented employment and health support to give people long term financial security.  

The government says the £2.5 billion Back to Work Plan will break down barriers to work and offer intensive support to those unemployed earlier, while the Chance to Work Guarantee will mean millions of disabled people can try work free from the fear that they could lose their benefits. As well as this, real wages grew 1.3% in the year up to November 2023.

This forms part of wider plans to get Britain working, by tackling inactivity and unemployment, while continuing to support those most in need.  

Mel Stride, Secretary of State for Work and Pensions, said:  “The economy has turned a corner, and with inflation falling we are providing millions of the most vulnerable households with another significant cash boost.

“Our fair approach to welfare is underpinned by a belief that the best way to secure long-term financial security is through work.

“This is why we have cut taxes for over 27 million working people and have launched a £2.5 billion Back to Work Plan to help thousands more people off benefits and into jobs.”

Chancellor of the Exchequer Jeremy Hunt said: “Our decisive action helped to more than halve inflation last year while building the foundations for long-term growth through sensible tax cuts, which will help people’s money go further.

“But the legacy of Covid and the ongoing Ukraine war has meant the last few years have been tough for many, which is why we’ve provided one of the largest support schemes in Europe worth £3,700 for the average household.”

UK Government Minister for Scotland John Lamont said: “This crucial Cost of Living Payment will benefit more than 680,000 people across Scotland.

“We are continuing to help those who need it most and putting more money in the pockets of hard-working families by cutting national insurance and halving inflation.”

Welsh Secretary, David TC Davies said: “Over 400,000 households in Wales will be receiving this payment directly into their bank accounts to help them with the Cost of Living.

“This payment is just part of the £104 billion package that the UK Government has put in place to ensure those most in need are supported.”

The Cost of Living Payments – worth £900 in total – come on top of a [significant package of support’ which has been delivered since autumn 2021. Including:

  • Cutting taxes for over 27 million working people this year through a 2% cut to Class 1 National Insurance Contributions, worth over £450 per year for the average worker.
  • Cutting taxes for self employed people by cutting Class 4 contributions, benefitting 2 million people, and abolishing Class 2 contributions, a tax cut worth an average of £350 per year.
  • Paying three million households the £150 Warm Home Discount this winter and 8.9 million pensioner households up to £600 in Winter Fuel Payments in December last year.
  • Providing Cold Weather Payments to vulnerable households to help them with their energy bills during winter. The scheme – which runs from 1 November 2023 to 31 March 2024 – provides low-income households with an automatic payment of £25 following periods of cold weather.
  • Providing the £900 Cost of Living Payments in 2022 and an additional a cash boost on top of this payment including £300 to pensioner households; £150 to disabled individuals in 2022 and last year.
  • Capping single bus fares at £2 outside of London until the end of next year to help millions of people make significant savings on their travel costs. The fare cap has helped cut bus fares in England by 7.4% between June 2022 and June 2023
  • Paying around half of the typical household energy bill between October 2022 and July 2023 through our Energy Price Guarantee and £400 support scheme.
  • Extending the 5p fuel duty cut and cancelling the planned increase – saving the average driver £200 over two years. 
  • Covering 85% of childcare costs for working households on Universal Credit, up from 70% under the legacy system – currently worth over £19,500-a-year for families with two children.
  • Expanding Free School Meals to 5–7-year-olds – benefitting 1.3 million children and boosting the value of Healthy Start vouchers by over a third – from £3.10 to £4.25.
  • Increasing the Universal Credit work allowance and cutting the taper rate, which was worth an extra £1000 a year to families on universal credit. 

The UK Government says it will continue to support vulnerable people with the Cost of Living from April this year by:  

  • Uprating benefits in line with inflation by 6.7%.  
  • Maintaining the triple lock and increasing the state pension by 8.5% - after the largest ever cash increase last year for around 12 million pensioners.
  • Investing £1.2 billion to restore Local Housing Allowance rates to the 30th percentile of local market rates, meaning 1.6 million private renters will see nearly £800 in additional help.
  • Increasing the National Living Wage by its largest ever cash amount in April– worth over £1,800 to the gross annual earnings of a full-time worker – and lowered the age threshold for eligibility by 2 years.

The changes coming into force in April are part of the UK Government’s £104 billion Cost of Living package worth an average £3,700 per household, including the £900 in direct Cost of Living Payments for those on means-tested benefits. 

People in need of additional support over winter are encourqged to check their eligibility through the Help for Households website for the various Cost of Living schemes that are place.

Energy bills support extended for an extra three months

  • The Energy Price Guarantee (EPG) will be kept at £2,500 for an additional three months from April to June, saving a typical household £160.
  • Energy prices are 50% lower than forecast in October, but remain high, with this support helping bridge the gap to lower prices forecast from the end of June.
  • Comes as Chancellor set to confirm new cost of living support at Spring Budget, including ending the pre-payment meter premium and help with childcare costs.

MILLIONS of households will get more support with high energy bills to help ease the cost of living, the Chancellor has announced today ahead of the Spring Budget.

The Energy Price Guarantee, which is protecting households by capping typical energy bills at £2,500, will be maintained at the same level for a further three months over April, May, and June, worth £160 in total for a typical household.

The Chancellor is announcing the extension today (15 March) as part of his Spring Budget, which focuses on easing the impact of rising prices, delivering on our promise to halve inflation, and growing the economy by supporting more people into work.

Government support has already cut the typical family energy bill by over £1,300 since October, stopping the average household energy bill hitting £4,279 a year this winter.

The Chancellor’s three-month extension of the Energy Price Guarantee at £2,500 means households won’t feel the full force of Ofgem’s Price Cap between April and June – which stands at £3,280 – helping to bridge consumers into the summer.

Lower wholesale gas prices are expected to feed through to lower household energy bills from July, where Cornwall Insight data suggests the Ofgem Price Cap will reach an estimated £2,100 a year for a typical household.

From April, more support is coming online with 8 million low income and vulnerable households set to receive at least £900 in cash payments over the next year, benefits and pensions set to rise by over 10 per cent, and the National Living Wage increasing to a record £10.42 an hour, so that it always pays to work.

The Spring Budget will go even further, providing hundreds of pounds more in help with childcare costs for parents on Universal Credit and ending the energy premium paid by households who use pre-payment meters, which will save 4 million families £45 a year from July.

Prime Minister Rishi Sunak said: “We know people are worried about their bills rising in April, so to give people some peace of mind, we’re keeping the Energy Price Guarantee at its current level until the summer when gas prices are expected to fall.

“Continuing to hold down energy bills is part of our plan to help hardworking families with the cost of living and halve inflation this year.”

Chancellor Jeremy Hunt said: “High energy bills are one of the biggest worries for families, which is why we’re maintaining the Energy Price Guarantee at its current level.

“With energy bills set to fall from July onwards, this temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation too.”

Energy Secretary, Grant Shapps said: “Putin’s illegal war has cost British families, which is why we’ve stepped in to pay around half of the typical household energy bill.

“With wholesale prices falling families will start to benefit, but in the meantime we’re stepping back in with the Energy Price Guarantee to prevent the typical electricity and gas bill exceeding £2,500. It’s just part of our plan to help families this winter.”

At Autumn Statement the Chancellor announced that the EPG was due to rise to £3,000 on April 1, with the government then expecting to borrow £12 billion to fund this support. Since then, energy prices have fallen by 50%, cutting the borrowing needed to fund energy support by two- thirds to £4 billion.

The change announced today also follows the latest Ofgem Price cap of £3,280 from April to June which, in large part, sets the cost for this three-month extension. Households would pay the full Ofgem price cap rate if there was no Energy Price Guarantee.

Holding down energy bills is also part of the government’s plan to halve inflation this year, and in November the Office for Budget Responsibility said that the EPG would lower the peak rate of inflation.