Britons up and down the country have been struggling with the rising cost of living for some months now, with the price of their weekly shops, energy bills, and fuel reaching unbelievable heights. Before announcing his resignation, Boris Johnson revealed that struggling households up and down the country would be receiving money as part of a 'big bazooka' package, to tide them over until spring - too late for any of his successors to cancel it.
Annual energy bills are predicted to hit around £3,000 from October 1 - up from less than £1,300 a year earlier, The Mirror reports. Ahead of this eye-watering rise, the Prime Minister sent the now-ex-Chancellor Rishi Sunak to announce £15billion of support.
This package began yesterday, with benefit claimants beginning to receive the first half of their £650 payment. £326 is slowly making its way to those who are entitled to the cost of living payment, with the second half - £324 - arriving in claimant's bank accounts in the autumn.
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Speaking to The Mirror, Chief Executive of Child Poverty Action Group, Alison Garnham said: "Today’s payment will still leave far too many families struggling to stay afloat. Families are facing a long term crisis that needs a long term solution, and government needs to recognise that dealing with the cost of living is made harder for millions by years of benefits cuts and freezes."
Meanwhile, Mike Brewer of the Resolution Foundation said that the payments being delivered from the Government were 'a bold and well targeted support package', but not enough, as he says that 'households are still going to feel a tight squeeze over the coming year'. For those wondering, this is what has been announced and when it will be sent out, month-by-month.
Earlier this year: £150 council tax rebate
People in England who are in council tax bands A-D should have received a £150 rebate since April. Although this money has been received by most of those who are entitled to it, many residents have experienced delays because it was administered by hundreds of individual councils; if you are yet to receive your rebate, then contact your local council.
Earlier this month - July 6 - National Insurance threshold increased
On July 6, the threshold of what you can earn before paying National Insurance rose from £9,880 to £12,570 a year. This has meant that some of the lowest earners in the workforce no longer have to pay the tax, and those still paying will save £330 a year.
But there are two factors that need to be taken into account. First of all, National Insurance was increased by Rishi Sunak from 12% to 13.25%.
Once you combine the tax and threshold rises, only those who make less than £37,000 will have more money than they did before April. Those who earn £30,000 are only £53 better off per year.
Additionally, if you work but are on Universal Credit, you will not feel the impact of the help because for every pound you make, 55p of benefits are 'tapered' away. Models suggest that a single parent on Universal Credit who earns £16,000 will gain £27 a month from the threshold change, but £15 of that will be cut in Universal Credit. This applies throughout the UK.
July 14-31 - £326 for most of those claiming benefits
8.3million UK claimants of Universal Credit, Tax Credits, Income-related JSA, Income-related ESA, Income Support, and Pension Credit will get two payments, first £326 then £324. If you are on any of these benefits, excluding tax benefits, your first payment will arrive in your bank account some time before the end of the month, if you did not receive it yesterday.
Payments are being staggered because there are so many claimants, and some complex cases will take longer to arrive. To qualify for these payments, claimants must have started a claim for these benefits by May 25, 2022 at the latest.
The £650 will be tax-free, will not count towards the benefit cap, and will have no impact on existing benefit awards. This applies throughout the UK.
From autumn - £326 for some Tax Credit claimants
People on Tax Credits will also get two payments of £326 and £324, but this will take longer to arrive because they are being administered by HMRC, not the DWP. After the Treasury originally hoped to give them out in late summer, it's now autumn for the first payment, and 'from winter' for the second payment - this applies throughout the UK.
By September - £150 for disabled Brits
Six million people living on the following disability benefits will receive £150 in their bank accounts by September:
- Disability Living Allowance
- Personal Independence Payment
- Attendance Allowance
- Scottish Disability Benefits
- Armed Forces Independence Payment
- Constant Attendance Allowance
- War Pension Mobility Supplement
To receive this payment, people must have been claiming, or have started a (later successful) claim, for these benefits by May 25, 2022. The payments will be made directly, be exempt from tax, not count towards the benefit cap, and not have any impact on existing benefit awards.
The timing has not been set in stone as the DWP has not yet passed the necessary laws to pay the money. This applies throughout the UK.
Autumn - second £324 payment for benefit claimants
As explained earlier, the £650 is making its way out to claimants in the form of two lump sums. A date has not yet been confirmed for the second payment, which will be delivered to the bank accounts of claimants up and down the country in the autumn, for those who are on Universal Credit, Pension Credit, and most legacy benefits.
Those on Tax Credits will have to wait longer - the only guarantee is that they will get it by the end of the year.
October to March - £400 energy bills discount for everyone
A 'buy now, pay later' scheme which would have shaved £200 from Brits' electricity bills from October 1, and then would have been paid back over the course of five years, has been scrapped. Instead, every household will have their electricity bills reduced by £400 from October as a non-repayable grant.
The £400 will not be credited to your account in one go, but will be sent to you over the course of six months, from October to March. If you pay by monthly direct debit, you may get £66.67 off your bill every month; it is a direct discount off your bills, rather than cash you can spend.
That means you will likely find your monthly bills are still higher than they were at the same time last year. Customers with pre-payment meters will have the money applied to their meter or via a voucher.
The mechanism for each firm isn’t confirmed yet. This applies throughout Britain but not Northern Ireland, where the administration has been told to devise its own scheme.
November to December - £300 payment for most pensioners
A one-off 'Pensioner Cost of Living Payment' of £300 will go to pensioner households who receive Winter Fuel Payment in November or December. These payments, worth £2.5bn, will be paid alongside the Winter Fuel Payment which is worth between £100 and £300 for pensioners.
For most pensioner households, this will be paid by direct debit. People are eligible if they're aged 66 or over by September 19, 2022, although some pensioners do not qualify for the Winter Fuel Payment. This applies throughout the UK.
April 2023: Benefit and pension uprating
Although benefits and pensions are not being permanently raised now, something many have called for, there will be a big rise next year. The April 2022 rise was a measly 3.1% below inflation because it was based on the CPI figure for September 2021. However, the April 2023 increase could be 10%, which would be above inflation.
Rishi Sunak said he would stick to that plan, subject to a review by the Work and Pensions Secretary. He said: "On current forecasts it's likely to be significantly higher than the forecast inflation rate for next year."
Mr Sunak also said the triple lock will return to the state pension - ensuring it rises by inflation, wages or 2.5% - whichever is highest. That means pensions are likely to rise by around 10% too.
This isn't a surprise, but is a big commitment after the Tories broke their manifesto pledge on the triple lock last time. This applies throughout the UK, and could of course change once a new Tory leader is in place.
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