(Updated 27 July 2023)

Cost Of Living Support

Two people sat on the floor, surrounded by bills

As inflation rises and the cost of living crisis worsens, the UK government have announced further cost of living support. Read on as we discuss the latest support package, how it will affect you and what you need to do to get this latest financial support.

Cost of living support

The chancellor, Rishi Sunak, has announced a much-called for windfall tax on the profits of oil and gas companies. With money raised by this tax he has pulled together a support package to help with the rising cost of living. And, as it was recently announced that the price cap will rise by a further 42% in October, this support is much-needed for UK households. Here’s what support you can expect including when and how you will receive it.

£400 energy grant for every UK household

Every household in England, Scotland and Wales is set to receive a £400 energy grant from October. This replaces the repayable loan of £200 that the government were originally planning to distribute in October. Instead, this £400 will be a grant meaning it does not have to be repaid at a later date. This measure is not means tested meaning every UK household with a domestic energy meter will receive this energy grant to help with the rising cost of gas and electricity bills. The £400 will not be paid as a lump sum but rather will be spread across energy bills over a 6-month period. Direct debit and credit customers will have the money credited to their account, while customers with pre-payment meters will have the money applied to their meter or paid via a voucher.

£650 one-off Cost of Living Payment for those on means tested benefits

Made in two instalments, those on means tested benefits will receive £650 in cost of living payments. This includes all households receiving the following benefits:

  • Universal Credit
  • Income-based Jobseekers Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Working Tax Credit
  • Child Tax Credit
  • Pension Credit

The 8 million households eligible will receive the first payment from July and the second in October. This payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards. Eligible households do not need to do anything to claim this additional payment but will be contacted by HMRC and DWP in due course.

One-off £300 Pensioner Cost of Living Payment

Those over state pension age (aged 66 or over) who receive the Warm Home Discount are due to get a £300 ‘Pensioner Cost of Living Payment’ top-up between November and December. The 8 million UK households eligible will receive this payment via direct debit. Again, the Winter Fuel Payment and its top-up are not taxable and will not impact your ability to claim other benefits.

£150 Disability Cost of Living Payment

As people with disabilities often face additional costs relating to specialist equipment, transport and specialist food, the UK government are pledging a £150 disability cost of living payment that will be paid in September. This will be paid to around 6 million people in the UK who claim the following benefits:

  • Armed forces independence payment
  • Attendance allowance
  • Constant attendance allowance
  • Disability living allowance
  • Personal independence payment
  • Scottish disability benefits
  • War pension mobility supplement

This extra £150 payment will be paid directly to those eligible. These payments will be exempt from tax, will not count towards the benefit cap, and will not have any impact on existing benefit awards. It is also possible that those on means tested benefits who are set to receive an extra £650 can receive this extra £150 on top if they claim the aforementioned benefits.

£500m increase and extension of Household Support Fund

In addition to the above measures, the Government is providing an extra £500 million of local support, via the Household Support Fund. This will be extended from this October to March 2023 and aims to help those most in need with payments towards the rising cost of food, energy, and water bills. This funding is distributed via local authorities and those struggling are encouraged to reach out to local councils to apply.

Debt help with the cost of living crisis

The latest cost of living support from the UK government will be a welcome relief to many struggling households. However, while the financial help will go some way to support those most in need, there will sadly still be some who are struggling to keep their finances on track amidst the cost of living crisis. With energy bills predicted to rise by 43% come October and inflation at a record high due to soaring food, energy and fuel bills many are already falling behind with payments and falling into problem debt. If you are struggling with the cost of living crisis use our online tool to get free online debt advice. Alternatively, you can contact our team of expert debt advisors via phone or email. For more information on the government’s latest cost of living support, visit the government website.

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