Financial Aid for Low-Income Families in May
Income benefits and state pensions were significantly increased in April as a yearly adjustment to keep pace with inflation. The move aims to ensure that incomes rise proportionately to the rising prices experienced in recent years due to the cost of living crisis.
Economic Forecast and Inflation
The economy has shown positive signs in recent months, with inflation easing to 3.2% in April from 3.4% in March. However, the decline has slowed after a sharp drop in late 2023, indicating that reaching 2020 inflation levels (1% or less) may take time.
Despite the easing, prices remain elevated compared to pre-pandemic levels. The decline in inflation does not imply a return to previous cost levels; rather, it indicates that prices are rising at a slower pace.
Hardship and Poverty
The government’s most recent data on low-income households reveals a concerning trend. Absolute poverty has increased for two consecutive years, with nearly one million more people falling into poverty in 2022/23 than in 2021/22.
Financial Support Available
Despite these challenging economic circumstances, here’s an overview of financial aid accessible to low-income families in May:
Benefit and Pension Payments
Regular benefit and pension payments will largely be issued as scheduled in May. If your payment date coincides with a bank holiday, expect to receive it on the preceding business day:
– Early May bank holiday (6 May): Payments should be made on 5 May
– Spring bank holiday (27 May): Payments should be made on 26 May
Universal Credit Expansion
The Department of Work and Pensions (DWP) has notified 500,000 benefit claimants that they must prepare for the transition from six ‘legacy benefits’ to Universal Credit.
Benefits Calculator
According to a 2023 report by Policy in Practice, nearly £19 billion in benefits goes unclaimed each year. Their website provides a useful calculator to determine potential benefits eligibility.
Household Support Fund Extension
The Chancellor of the Exchequer confirmed in the spring Budget that the Household Support Fund (HSF) would be extended for six months beyond its initial March 31 deadline. The HSF provides funding to local councils for supporting vulnerable households in their areas.
Budgeting Advance Loans
The government offers interest-free ‘budgeting advance loans’ for Universal Credit recipients facing financial emergencies. The repayment period has been increased from 12 to 24 months.
Charitable Grants
Individuals facing financial hardship may be eligible for charitable grants. Criteria and funding vary. The Turn2us charity offers an online tool to search for potential grants.
Energy Provider Assistance
Several energy suppliers, such as Scottish Power, EDF, E.ON, and Octopus, offer support for customers struggling with energy expenses. Contact your provider for more information.
Council Tax Reduction
Specific criteria allow for council tax discounts of up to 100%. Those who can demonstrate severe hardship may qualify for discretionary reductions.
Free Childcare Expansion
All working parents in the UK are now eligible for 30 hours of free childcare for 3 to 4-year-olds. From April 1, 15 hours of free childcare will be available for 2-year-olds.
Energy Price Cap
The energy price cap reduced to £1,690 in April. Analysts predict a further drop to £1,559.61 in July, followed by a slight increase to £1,631.44 in October.
Benefits and Pension Increases
Benefits increased by 6.7% in April, aligned with the September 2023 inflation rate. The state pension saw an 8.5% increase due to the triple lock guarantee, marking its second-largest increase after the 10.1% rise in 2023.
Additional Notes
– Payments for the state pension and the winter fuel payment are made in arrears, meaning recipients may not receive the increases until May 6.
