Cost of Living Support

With inflation forecast to continue above the Bank of England’s target rate until the end of 2023, there is a risk that some people will begin to turn to credit to pay for essential goods and services, with others falling into arrears or cutting back on essentials.

Fortunately, there is financial support available immediately to help ease the pressure on UK households.

 

Direct cost of living support

 

Energy costs

The Government has announced help with rising energy costs for all UK households. From 1st October 2022, energy costs have been capped so that the typical annual household bill will not exceed £2,500 for a period of two years. It’s important to note that the cap is levied on the unit prices of gas and electricity, which means households that use more or less than average will have higher or lower than average bills. In order to see what the cap means for your household, you will need to speak to your energy supplier.

The price cap is in addition to the previously announced £400 energy bill support scheme. Energy suppliers will deliver this support direct to households over six months from October 2022. Direct debit and credit customers will automatically have the money added to their account, whilst pre-payment meter customers will have the money paid via a voucher or direct to their meter.

 

Council Tax

In February 2022, the Government announced a £150 Council Tax rebate for households in England in Council Tax bands A-D. This payment will be automatically paid into your account by your council.

 

Cost of Living Payment for those on means tested benefits

Any household that received (or was entitled to receive) means tested benefits for in period 26 April 2022 to 25th May 2022, will receive £650 this calendar year. The payment will be made in two instalment, one in July and one in Autumn. This includes all households receiving the following benefits:

• Universal Credit
• Income-based Jobseekers Allowance
• Income-related Employment and Support Allowance
• Income Support
• Working Tax Credit
• Child Tax Credit
• Pension Credit

 

Cost of Living Payment for pensioners

Pensioner households that receive the Winter Fuel Payment are to receive an extra £300 this year, on top of other Winter Fuel Payment they already receive. The payment, which is automatic will be made in November/December.

 

Disability Cost of Living Payment

Those who receive the following disability benefits (as of 25th May 2022) will receive a one-off payment of £150. The payment will be paid directly from September.

• Disability Living Allowance
• Personal Independence Payment
• Attendance Allowance
• Scottish Disability Benefits
• Armed Forces Independence Payment
• Constant Attendance Allowance
• War Pension Mobility Supplement

 

Household Support Fund

The Government has increased the Household Support Fund by £500m. The fund helps those in most need with payments towards the rising cost of food, energy, and water bills. You’ll need to speak to your local authority, which administers the fund in your area, to find out more. Find your local council at www.gov.uk.

 

Budgeting

 

If you’re struggling to maintain your debt repayments or essential monthly expenditure then the first thing you need to do is create a household budget. Writing everything down allows you to more easily identify any problems or opportunities there may be for saving money.

Write down all of the income you receive in a month and then all of your monthly expenditure. Your expenditure should be broken down into priority spending (these are things like child maintenance, Council Tax, gas or electricity, hire purchase, Magistrates Court fines, mortgage or rent, phone, tax and TV licence) and non-priority spending, which is everything else.

Once you’ve done this, you need to subtract your expenditure from your income to see whether you have any money left over at the end of the month (your disposable income). If you don’t have anything left over, are there any obvious areas of your non-priority spending that you can reduce in order to ensure you can meet your essential outgoings (see reducing your expenditure below)? If there isn’t, don’t worry, the next step is to look at ways to maximise your income (see maximising your income below).

If you are still struggling to maintain your contracted monthly debt repayments or essential monthly expenditure, there is help available. Contact us to speak to an adviser about your options.

 

Maximising your income

 

Benefit entitlement

Check that you are in receipt of all of the welfare benefits that you are entitled by using the Turn2Us benefits calculator.

 

Help from your local council

Your local council administers a fund called the Household Support Fund. Find your local council at www.gov.uk.

 

Grants

Some charities offer grants to people in need based on factors such as location or profession. Search for charitable grants you may be entitled to at Turn2us.

 

Pension

If you’re over 55, you may be eligible to draw down some of your pension as a lump sum. This is only something you should consider doing after taking expert advice as it will reduce your future pension payments.  Get advice from Pension Wise.

 

Reducing your expenditure

 

It’s difficult to find ways to reduce spending at the moment but Money and Pensions Service has a comprehensive guide on what to look out for.  Go to the MoneyHelper website to find ways to save money on household bills.

 

Other sources of help

 

Food and essentials

Trussell Trust has over 1,200 foodbanks across the UK.  Visit the Trussell Trust website to find the foodbank closest to where you live.

 

Risk of homelessness

If your struggling to pay your housing costs, you may qualify for the Breathing Space Scheme, which will provide 60 days of respite from enforcement action and allow you to negotiate an affordable repayment plan.

If you are at imminent risk of eviction, contact housing charity Shelter for advice.

 

Mental health

If you feel that the cost of living crisis is affecting your mental health, get urgent help from Mind.

 

You can find out more about the support you may be entitled to at www.gov.uk – Help for Households.