People across Britain are still struggling to meet their financial obligations as the cost of living crisis continues to eat away at household budgets, with a recent study by the Financial Conduct Authority putting the total number of people to contend with at up to 10million.
While inflation finally fell from 10.1% to 8.7% in May, the cost of goods in supermarket aisles and on high street shelves remains high as national finances continue to strain after a long winter of sky-high energy bills.
The most recent data from the Office for National Statistics (ONS) shows that food prices are rising at their fastest pace in nearly 45 years for the year to April, with around 44% of adults saying they have responded by spending less on groceries and essentials, usually switching to cheaper alternative brands, according to the ONS.
Additionally, 50% of shoppers say they’re buying fewer items, 67% say they’ve noticed an increase in their cost of living in the past month, and 97% say they’ve been impacted by rising grocery prices.
Below we take a look at what support is available to households in July.
an additional £1,350 in support paid
Despite Rishi Sunak’s energy bill support scheme expiring at the end of March (an initiative which distributed £400 in monthly installments of £66 and £67), millions of low-income households will receive additional cost-of-living support from the government this year worth up to £1,350 in total.
Eight million claimants eligible for means-tested benefits, including those on Universal Credit, Pension Credit and Tax Credits, will receive £900 in installments from this spring, with the money going straight to bank accounts in three installments, the Department for Work and Pensions (DWP) said.
There will also be a separate payment of £150 for over six million disabled people and an additional £300 for over eight million pensioners.
Here are the payment windows that have been announced so far, with more specific dates expected later in the year:
- £301 – First cost of living payment – already issued between 25 April and 17 May (or 2-9 May for those on tax credits but not other low income benefits)
- £150 – Disability Payment – during Summer 2023
- £300 – Second Cost of Living Payment – in Autumn 2023
- £300 – Pensioners Payment – during winter 2023/4
- £299 – Third Cost of Living Payment – in Spring 2024
Benefits go out as usual
The usual state support in the form of benefits and pension payments will also normally take place in July, with no public holidays scheduled to confuse delivery dates.
Anyone expecting to receive any of the following from the DWP can expect to receive their money on the usual date this month.
- Universal Credit
- State pension
- Pension credit
- Disabled allowance
- Personal Independence Allowance
- Attendance allowance
- Carer’s allowance
- Employment support allowance
- Income support
- Job search allowance
For more information on how and when state benefits are paid, please see the government website.
The energy price guarantee has now expired
The sweltering weather we can expect in July – judging by last year’s record-breaking heatwave – may not be comfortable for everyone, but it will at least significantly reduce the need to turn on the central heating, which has proven such an expense over the winter just ended.
The Government’s Energy Price Guarantee (EPG) – introduced by Liz Truss last September to ensure households pay no more than £2,500 for their electricity and gas, with the Government subsidizing the remainder due to suppliers as part of Ofgem’s Energy Price Cap (EPC) – was extended by Chancellor Jeremy Hunt in his March 15 budget for a further three months.
Mr Hunt was reportedly tempted to up the EPG to £3,000, a considerably less generous offer that would have eased the burden on the state, but ultimately thought better, extending the guarantee into April, May and June.
Now that the EPG has finally expired, consumers will again pay the EPC rate, although Ofgem has announced it will be £2,074 from July 1, a huge drop from the £3,280 set in the second quarter, from which households were protected by the intervention of the government’s overriding guarantee.
The 17% drop reflects recent falls in wholesale energy prices – the amount energy companies pay for electricity and gas before supplying them to households – and, although this is a significant drop from the sky-high rates of the past two years, the figure is still more than £1,000 a year above pre-pandemic levels.
As for what could happen next, consultancy Cornwall Insight predicts July’s dip will be followed by another dip in October, when it expects the typical annual bill to be £1,976.
Unfortunately, he believes the typical bill will rise again in January 2024 to £2,045 and Cornwall does not expect energy prices to return to pre-Covid levels before the end of the decade at the earliest.
He also warned customers that prices remain subject to volatility in the wholesale market, with the UK’s reliance on energy imports meaning geopolitical incidents like the war in Ukraine could continue to have a negative impact.