As inflation marginally drops to 3.9%, UK families resort to drastic measures to reduce costs. With government benefit payments steady and the Energy Price Cap expected to fall, some financial relief is on the horizon.
Millions of UK households continue to face financial challenges, even as inflation slightly eases to 3.9 percent. The Joseph Rowntree Foundation reports that to cut costs, 2 million families have resorted to unplugging fridges or freezers, and 2.8 million have incurred debts to pay for food. Additionally, escalating heating expenses have led 1 in 6 to use only a “warm room” at home for heat.
Government benefit schedules remain unaffected in January, barring New Year’s Day changes. Payments for Universal Credit, state pension, and various allowances, including those for disabilities, carers, and jobseekers, will be made as usual.
Anticipated is a further cost of living payment of £299, to be distributed between February 6 and February 22, 2024, to recipients of certain benefits and tax credits. The Warm Home Discount scheme also proceeds, offering a £150 reduction on electric and gas bills to eligible parties. Prospects for some relief are also buoyed by the predicted fall in the Energy Price Cap (EPC).
Benefit uplifts are expected in April 2024, with a 6.7% increase to benefits and an 8.5% augmentation for state pensions, as announced by Jeremy Hunt. Nonetheless, the Child Poverty Action Group warns that unchanged benefit caps might undercut these increments in real terms.
Amidst these developments, Cornwall Insight forecasts a marked downturn in energy bills, with expectations of a 16% drop from the previous quarter, translating to savings of over £300 annually. This would mean the energy price cap could decrease from £1,928 to £1,620 beginning April, potentially dropping further to £1,497 by July 2024.
The prediction comes amidst stable European gas stocks and falling wholesale prices, helped by mild weather and adequate supply, despite geopolitical tensions near the Red Sea. The consultancy stresses the need for a shift towards domestic renewable energy for sustained cost reductions. Which? magazine’s energy editor Emily Seymour comments on the anticipated relief for households, with varied implications for those on variable or fixed energy tariffs. Overall, the energy bill decrease offers a reprieve to UK residents during ongoing economic difficulties.
