Key September 2024 Dates for Benefits and Pensions Post-Cost of Living Support
Across the UK, millions are grappling with the consequences of relentless inflation, which has driven the cost of essentials to unprecedented levels. Household bills, groceries, mortgages, and rents have all soared, exacerbating the ongoing cost of living crisis. Although inflation briefly hit the Bank of England’s 2 percent target in June for the first time in three years, it crept up again to 2.2 percent in July. While this is a significant drop from the October 2022 peak of 11.1 percent, it doesn’t mean prices are returning to previous levels—only that they are increasing at a slower rate.
The latest annual figures on low-income households highlight the severity of the UK’s economic challenges. Absolute poverty has risen for two consecutive years, with nearly a million more people falling into poverty in 2022/23 compared to the previous year. Recent research from the Joseph Rowntree Foundation paints an even starker picture, revealing that nearly a million people are just £10 away from poverty, and 3.2 million are only £40 clear.
In response to these troubling trends, the new Labour government has vowed to address the root causes of the cost of living crisis. Work and Pensions Secretary Liz Kendall has announced that the Department for Work and Pensions (DWP) will focus on reducing “economic inactivity” as part of their new ‘Back to Work’ plan, aimed at boosting employment across the country. The Chancellor is expected to unveil the government’s first budget in October, with many experts anticipating tax increases and spending cuts as part of the strategy.
Benefits to Be Paid as Usual
For September, benefits and pension payments will be issued as usual, as there are no bank holidays this month. These include Universal Credit, state pensions, pension credit, child benefit, disability living allowance, personal independence payment, attendance allowance, carer’s allowance, employment support allowance, income support, and jobseeker’s allowance.
Household Support Fund
In the spring Budget, former Chancellor Jeremy Hunt extended the Household Support Fund (HSF) until the end of September 2024. This fund provides local councils with the resources to support vulnerable households in their areas, which can include cash grants, supermarket vouchers, or energy bill assistance.
Additional Assistance Available
For those facing financial difficulties, several options are available:
Budgeting Advance Loans: The government offers interest-free ‘budgeting advance loans’ to individuals on Universal Credit facing financial emergencies. The loan is automatically deducted from future Universal Credit payments and can be as much as £348 for singles, £464 for couples, or £812 for those with children.
Charitable Grants: There are a variety of charitable grants available for individuals in need, including those who are disabled, ill, carers, bereaved, unemployed, or students.
Energy Provider Support: Many energy suppliers, including Scottish Power, EDF, E.ON, and Octopus, offer assistance to customers struggling with energy bills. British Gas, for example, provides grants of up to £2,000 to customers of any energy provider who meet specific criteria.
Council Tax Reduction: If you qualify for certain benefits or meet specific criteria, you may be eligible for a council tax reduction of up to 100 percent. Your local council may also offer discretionary reductions for those experiencing severe financial hardship. You can apply through your local council’s website.
Expansion of Free Childcare
The UK government has expanded its free childcare provisions, allowing working parents 30 hours of free childcare for children aged 3 to 4 years. Starting from April 1, this entitlement was extended to include 15 hours of free childcare for 2-year-olds. Beginning September 1, the program will further expand to cover all children from nine months old. To qualify, parents must apply before the start of the September term and reconfirm their eligibility every three months. Additionally, parents can apply for tax-free childcare, which refunds 20p for every 80p spent on childcare, up to a maximum of £500 per year.
Will the Energy Price Cap Decrease Again in 2024?
The energy price cap dropped to £1,568 in July, a reduction of £122 from the April cap of £1,690. However, analysts at Cornwall Insight predict the cap will rise again in October to £1,723.06. The price cap, which limits the amount energy suppliers can charge for each unit of energy, is reflective of recent declines in wholesale energy costs. However, the future of energy prices remains uncertain.
Potential Changes to Benefits and Pensions
The Labour government is expected to implement significant changes to benefits and pensions, though these will likely occur gradually. The government has announced plans to review Universal Credit to ensure it “makes work pay and tackles poverty.” The ‘Back to Work’ plan includes a national jobs and career service to help people find and progress in work, as well as new work, health, and skills plans aimed at the economically inactive. Additionally, a youth guarantee will be introduced to support young people aged 18 to 21 in finding employment, apprenticeships, or training.
However, the government has faced criticism for refusing to lift the two-child benefit cap, which campaigners argue is keeping nearly a million children in poverty. On pensions, Labour has ruled out matching the Conservatives’ ‘triple lock plus’ pledge, which would have increased the tax-free pension allowance annually in line with the triple lock.