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The UK’s snap general election is only a few days away, with all the major parties sharing their plans to tackle the ongoing cost of living crisis.
Following the rampant inflation of the past few years, sky-high prices persist, as millions continue to struggle to pay their bills, afford the essentials or even keep a roof over their heads.
Inflation finally reached the Bank of England’s 2 per cent target in June – for the first time in three years. It is down from a peak of 11.1 per cent in October 2022.
While this is welcome economic news, declining inflation unfortuntely does not mean costs are going back to what they were previously, just that they have begun rising less fast.
The cost of living in the UK remains a major talking point, with all parties pitching their plans to get the UK’s economy back in shape and bring prices back to sustainable levels.
Recent research from the Joseph Rowntree Foundation shows that nearly a million people are only £10 away from poverty, while 3.2 million are just £40 clear. They have urged party leaders to commit more to tackling poverty in the country.
The government’s latest annual figures on low-income households paint a bleak picture of the UK’s economic situation. They show absolute poverty has increased for two years in a row, with nearly a million more people in poverty in 2022/23 than in 21/22.
Meanwhile, the Trussell Trust revealed in May that their food banks delivered 3.1 million emergency food parcels over the past year – the highest number in their history.
Against these difficult economic circ*mstances, here is an overview of the financial support available to low-income families this July and key dates for benefits recipients to look out for:
Benefits going out as usual
The usual benefits and pensions payments will be going out mostly as normal in July. These are:
- Universal Credit
- State pension
- Pension credit
- Child benefit
- Disability living allowance
- Personal independence payment
- Attendance allowance
- Carer’s allowance
- Employment support allowance
- Income support
- Jobseeker’s allowance
As there are no bank holidays in July, you can expect to receive your payments on the usual days.
The DWP has also issued a warning to 500,000 benefit claimants that they will soon need to take action as six ‘legacy benefits’ are replaced by Universal Credit.
For more information on how and when state benefits are paid, please visit the government’s website.
A report from Policy in Practice last year shows that nearly £19bn in benefits goes unclaimed a year – they offer a helpful calculator to work out what you might be entitled to.
Have you been affected by the issues in this story? Get in touch via email: albert.toth@independent.co.uk
Household support fund
In the spring Budget, Jeremy Hunt confirmed the Household Support Fund (HSF) would be extended for 6 months beyond the original 31 March deadline.
The HSF is funding given to all local councils to support vulnerable households in their area. Councils are free to allocate the funds however they feel is best.
For instance, some have provided cash grants, supermarket vouchers, or energy bill assistance. You will need to visit your local council’s website to find out what help may still be available.
To find out what support is available to you, the End Furniture Poverty charity offer a helpful assistance finder tool.
Other help available
Budgeting advance loans
The government offers a ‘budgeting advance loan’ for people on Universal Credit who face an emergency lack of money. Prior to the budget, the repayment period for these loans was 12 months. It has now been doubled to 2 years.
These loans are interest-free, and automatically deducted from Universal Credit payments. You can borrow an ‘advance’ of up to:
- £348 if you’re single
- £464 if you’re part of a couple
- £812 if you have children
Charitable grants
If you are struggling financially, you may be eligible for certain charitable grants. There are a wide range of grants available depending on your circ*mstances.
However, these grants will typically require you to meet specific criteria and only be able to offer limited funds.
Charitable grants are available for people who are disabled or ill, carers, bereaved, unemployed, students – and many more. The charity Turn2us has an online tool to search for grants which may be available to you.
Energy provider help
A number of energy suppliers offer help for those struggling with their energy bills. These include Scottish Power, EDF, E.ON and Octopus. It is worth contacting your energy provider to find out if you are eligible.
British Gas also offer a grant of up to £2,000 to customers of any energy provider. You will need to meet specific criteria to be eligible, and can apply on the British Gas Energy Trust website.
Council tax reduction
If you meet certain criteria or are on certain benefits, you may be able to apply for a discount on your council tax discount of up to 100 per cent.
Your local council may still be able to offer you a discretionary reduction if you are able to demonstrate you are facing severe hardship and can’t afford to pay your council tax.
To apply for a council tax reduction, you can contact your local council via the government’s website.
Up to 30 hours free childcare
All working parents in the UK are currently entitled to 30 hours of free childcare for children aged 3 to 4. From April 1, this entitlement will expand to include 15 hours of free childcare for 2-year-olds.
You must apply online and reconfirm your eligibility every three months, in time for each school term. Working parents can also apply for tax-free childcare, giving back 20p for every 80p you put towards childcare, up to a maximum of £500 a year.
There are two more expansions to free childcare planned in the coming years:
- September 2024: All children from the age of nine months can receive 15 hours of free childcare.
- September 2025: All children under five can receive 30 hours of free childcare.
Energy Price Cap: Will it go down again in 2024?
The energy price cap dropped to £1,690 in April, down £238 from the January cap of £1,928.
Analysts at the trusted Cornwall Insight predict this figure will fall again in July to £1,559.61, but then rise slightly in October to £1,631.44.
The energy price cap is the maximum amount energy suppliers can charge you for each unit of energy if you’re on a standard variable tariff. That includes most households. It is expressed as an annual bill for an average home.
The recent decline in prices is reflective of recent drops in wholesale energy costs – the amount energy firms pay for their electricity and gas before supplying it to households.
Although it is a significant slide from the record-high rates of the last two years, the figure remains almost £1,000 a year above pre-pandemic levels.
How will the general election affect benefits and pensions?
There are likely to be some significant changes to benefits and pensions after July 4, whichever political party wins. However, any planned changes are unlikely to take effect straight away, with most going through consultation periods which can take months, or even years.
Labour has said it will review Universal Credit so that it “makes work pay and tackles poverty”. The party also wants to reform work capability assessments, alongside a plan to support disabled people to work.
The Conservatives have said they want to take “bold action” to reduce the number of people claiming benefits. This includes reforming disability benefits by changing how capability is assessed, looking at vouchers instead of cash payments, and introducing a new service to approve sick notes.
The party also says it will look at removing benefits entirely for people who refuse ‘suitable jobs’ after 12 months on benefits as well as accelerating the roll out of Universal Credit.
On pensions, prime minister Rishi Sunak has committed his party to a ‘triple lock plus’ pledge. This means that, as pensions continue to rise with the highest of either inflation, wage growth of 2.5 per cent, the tax-free allowance on them will rise too. Under this pledge, someone on the basic state pension will never pay tax on this income.
Labour have ruled out matching this pledge, calling it not ‘credible’ in light of the country’s economic situation. Instead, they have committed to a review of workplace pensions to ensure financial security in retirement.
