People have been warned they could face a number of changes to their finances over the next few weeks. Millions of people are seeing increased financial pressure from rising costs which have seen inflation soar to a 40-year high and the value of the pound plummet in recent days.
The crisis has seen the UK and Welsh Governments roll out a number of cost of living payments to help those hardest hit as well as the Bank of England increasing the interest rate to its highest level since the 2008 crash. Last Friday UK Government chancellor Kwasi Kwarteng unveiled a mini-budget to tackle the crisis which included cutting taxes and reversing the 1.25 percentage point National Insurance rise announced in April.
With everyone looking for ways to keep their heads above water there are a number of important changes coming in October which could affect your finances including cost of living payment deadlines, energy price rises, and tax changes. Here is everything you need to know about the changes happening in October.
Read more: Everything you need to know ahead of energy price rise this week
New energy price guarantee
The new energy price guarantee, announced earlier this month by the UK Government in a bid to tackle the cost of living crisis, will see the typical household's energy bill capped at £2,500 per year – or £200 per week – for two years starting from October 1. The new guarantee effectively replaces the price cap, which was set to rise to £3,549 from the start of October and would have plunged millions of people towards fuel poverty, but the average home will still pay around 95% more on their energy bills this winter than last year. Find out everything you need to know about the energy price increases, including how much you're likely to pay and when to take a meter reading, here.
£400 discount off energy bills
Earlier this year the UK Government announced the new energy bills support scheme (EBSS) which will give around 29m households in the UK a £400 discount off their energy bills from October. The discount is set to be paid in six instalments from October with £66 monthly payments each in October and November followed by an increase to £67 in December, January, February, and March. It was originally announced in February as a £200 payment but was later doubled to reflect soaring costs of living.
The money will generally be automatically credited to your account but how you receive the money depends on how you pay your bills and which company you are with. You can find out more here.
Final deadline for £324 cost of living payment
The DWP is due to confirm details of when the second cost of living payment will arrive in bank accounts soon. The payment – worth £324 – is due to be sent out to those on means-tested benefits in the autumn but the DWP said October 31 will be the latest possible qualifying day for the second payment meaning it will arrive after this date. A spokesperson recently said there was "no update on the £324 payment yet, but we’ll definitely let people know as soon as we can".
£150 disability payment due
Cost of living payments worth £150 for people on certain disability benefits will continue to be issued into October. The DWP confirmed it had started issuing payments from September 20 but said the "vast majority" of people will get the cash in early October after it admitted that had been delays sending out the money. You can read more about the payment here.
Premium bond rates
National Savings and Investments (NS&I) will increase the prize fund rate on its premium bonds from October. The rate will rise from 1.40% to 2.20%, adding an expected £76m to the prize fund for October. The changes will see the number of £5,000, £10,000, £25,000, £50,000, and £100,000 prizes almost double. There will also be 19 times as many £50 and £100 prizes paid out from October. The odds of each £1 premium bond number winning a prize will also improve from 24,500 to one to 24,000 to one.
Tax return self-assessment deadline
If you've never submitted a self-assessment tax return before you must register by October 5. This is for the 2021-22 tax year. Registering for self-assessment means you'll be given your unique taxpayer reference (UTR) to file your tax return. The tax return deadline for the 2021-22 tax year is October 31 for those completed on paper forms and January 31, 2023, for online returns. You can check if you need to complete a tax return by using the free online tool on Gov.uk.
Those who need to complete a self-assessment tax return are generally those who are newly self-employed and earned more than £1,000; are a new partner in a business partnership; have received any untaxed income; or are claiming child benefit but they or their partner have an income above £50,000.
New inflation rate
The Office for National Statistics (ONS) will release inflation rates for the 12 months to September on October 19. Consumer Price Index (CPI) inflation is currently at 9.9% – slightly down on the 10.1% that was recorded in the previous month, which was also a 40-year high in the UK. Inflation is a figure used to explain how much the prices of everyday essentials have increased and rising inflation means prices are rising and you're getting less for your money than before.
Tax return deadline
If you're submitting your tax return in the post the deadline for paper forms is October 31. If you miss this deadline you’ll be charged a late filing penalty of £100 if your tax return is up to three months late.
You can be charged more on top of this, plus interest, if it is later or if you pay your tax bill late. If you don't send your paper forms in time you can instead fill out your tax return online. The deadline for this is January 31, 2023. You should not submit both a paper and online tax return.
Changes to land tax
Earlier this week the Welsh Government announced changes to land transaction tax which you pay when you buy a house. Under the new rules, which come into effect on October 10, people buying homes in Wales for less than £225,000 will pay no tax on the purchase with the threshold rising from £180,000. You can read more about that here.
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