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Last month, inflation rates unexpectedly climbed to 4.0%, significantly higher than the Bank of England’s target of 2.0%. This rise has taken economists by surprise, as they had anticipated a decrease.
Concurrently, the start of 2024 has been marked by severe cold, contributing to sustained high costs in essentials like food, energy, and housing. According to the Resolution Foundation, both food and energy expenses are still above the levels seen before the pandemic. However, there’s a possibility of stabilization or reduction in these costs as 2024 progresses.
Financial Strain on Low-Income Households
Research conducted by the Joseph Rowntree Foundation highlights the financial struggles faced by low-income families. Over 56% of such households couldn’t afford basic necessities like food or heating last year. The financial strain has also led to reduced spending on gifts, with 73% of these families lacking a stable income to cover essential expenses.
State Financial Assistance in February 2024
February will see the usual distribution of benefits and pensions, unaffected by bank holidays. These include Universal Credit, State Pension, Pension Credit, Disability Living Allowance, Personal Independence Payment, Attendance Allowance, Carer’s Allowance, Employment Support Allowance, Income Support, and Jobseeker’s Allowance. Detailed information on these benefits can be found on the government’s official website.
Upcoming Cost of Living Payment
The final cost of living payment, amounting to £299, is scheduled between February 6 and February 22, 2024. Eligible recipients include those on Universal Credit, Jobseeker’s Allowance, and other specified benefits. This payment follows several others disbursed throughout 2023. If you haven’t received expected payments, contacting the DWP is advisable.
Winter Support Schemes
Cold Weather Payments
Eligibility for the Cold Weather Payment, £25 for every seven consecutive days of sub-zero temperatures, depends on your postcode. In Scotland, this has been replaced by the Winter Heating Payment.
Warm Home Discount
This one-off £150 payment aids those with high energy costs and low income, including those receiving the Guarantee Credit element of Pension Credit. The discount is applied to energy bills from October 2023 to March 2024. Eligible recipients should have been notified by January 2024.
Winter Fuel Payment
For those over the state pension age, this payment offers between £250 and £600 to help with heating bills. It’s automatically granted to those receiving a state pension or most benefits.
Energy Price Cap Trends
The Energy Price Cap stood at £1,928 as of January 1, 2024. Predictions by Cornwall Insight suggest a decrease in April to £1,660, followed by a further drop in July, but a slight increase towards the end of the year. This fluctuation reflects changes in wholesale energy prices.
Benefit and Pension Increases in 2024
Benefits and state pensions are expected to rise in April 2024. The autumn statement from Jeremy Hunt indicated an increase in benefits by 6.7% and state pensions by 8.5%, based on the September rate of inflation. However, the Child Poverty Action Group warns that not adjusting the benefits cap could lead to real-terms cuts for many.
