The United Kingdom received a rare flood of positive economic news in mid-August when the Office for National Statistics announced that wage increases had risen at a record pace, inflation had fallen to 6.8 percent and food prices had begun to fall.
While that might have suggested that the cost of living was finally falling, the positive sentiment masked the fact that core inflation – which removes fluctuating food and energy prices from the equation – remained stubbornly unchanged at 6.9 percent, which some experts prompting warnings that any increase would be “swallowed” by higher borrowing costs.
With inflation still well above its 2 percent target, it seems all but certain that the Bank of England will implement another rate hike to curb inflation at the next meeting of its monetary policy committee in September.
This is likely to see the current base rate rise from 5.25 per cent to 5.5 per cent, another unwelcome development for many already struggling with mortgage payments, particularly those with tracker or standard variable rate mortgages following the lead of the central bank .
“Most people have not yet felt the full extent of interest rate pressure and it is only when historic fixed rates are removed that we will truly know the full extent of the economic strain that the rise in interest rates has caused,” Nicholas Hyett, investment manager at Wealth Club, warned . “We’re not out of the woods yet.”
With this in mind, here is a look at the government financial support available to households in September this year.
Although Rishi Sunak’s Energy Bill Support Scheme expires at the end of March (an initiative that paid out £400 in monthly installments of £66 and £67), millions of low-income households will receive further cost of living support from the government this year, worth a total of up to at £1,350.
Eight million claimants of means-tested benefits, including those on Universal Credit, pension credits and tax credits, will receive the next £300 cost of living installment in bank accounts in three tranches under a scheme that began this spring, the Department for Work and Pensions said (DWP) with. The payments total £900.
There will also be a separate payment of £150 for more than six million people with disabilities and an additional payment of £300 for over eight million pensioners.
Here are the Payment window that have been announced so far, more precise dates are expected later in the year:
- £301 – First living expenses payment – already issued between April 25th and May 17th (or May 2nd – 9th for those on tax credits but no other low earner benefits)
- £150 – Disability Payment – between June 20 and July 4, 2023
- £300 – Second Living Expenses Payment – in Autumn 2023
- £300 – pension payment – winter 2023/2024
- £299 – Third Living Expenses Payment – in Spring 2024
Benefits expire as usual
The usual government support in the form of social benefits and pension payments will also expire in September as usual, without any public holidays to confuse delivery dates.
Anyone expecting one of the following payments from the DWP can expect their money at the usual date this month.
- Universal credit
- State pension
- Pension credit
- Disabled Living Support
- Personal Independence Payment
- Attendance allowance
- Need for care
- Employment support grant
- social care
- Unemployment benefits
For more information about how and when government benefits are paid, see Government website.
The energy price cap falls below the guarantee threshold
The delayed improvement in the weather we are experiencing in September may not be pleasant for everyone, but it will at least significantly reduce the need to turn on the central heating, which proved a major hassle last winter.
The Government’s Energy Price Guarantee (EPG) – was introduced a year ago by short-lived Prime Minister Liz Truss to ensure households pay no more than £2,500 for their electricity and gas, with the Government matching the balance paid to suppliers under the energy price cap owed by Ofgem, subsidized (EPC) – was extended for a further three months by Chancellor Jeremy Hunt in his March 15 Budget.
Mr Hunt was reportedly tempted to increase the EPG to £3,000, a significantly less generous offer which would have reduced the burden on the State, but decided to extend the guarantee at the current level to April, May and June, before he finally implemented this increase will take effect from July.
However, with Ofgem’s cap now falling below £2,500 and set at £2,074 for the third quarter of 2023, the EPG has become irrelevant for most anyway, with the vast majority of households now paying the EPC as normal.
This figure of £2,074 represents a huge 17 per cent drop from the £3,280 set in the second quarter as the cap from which households were protected by the then very necessary intervention of the government’s overarching EPG.
This drop reflects the recent decline in wholesale energy prices – the amount energy companies pay for electricity and gas before delivering them to homes – and while it is a significant drop from the eye-popping prices of the last two years, the Figure still over £1,000 a year above pre-pandemic levels.
Ofgem has since announced that the cap will be set at £1,923 for the final quarter of the year.
The consulting firm Cornwall Insight sees what could happen next almost no change Until the next EPC is announced for the quarter starting January 1, 2024, the typical annual bill at that time is expected to be £1,932.24.
The forecaster is also currently predicting slight declines in the second and third quarters of next year before a slight increase from October next year.
Nevertheless, the overall picture looks much more stable than it did a year ago, when the consequences of the Russian war in Ukraine were first felt on global energy markets, which is certainly a positive development.