Millions to Benefit from Increased Incomes as New Financial Year Begins
As the new financial year gets underway, millions of households across the UK can expect to see an increase in their incomes, despite the ongoing challenges posed by the cost of living crisis and inflation. According to reports, bills have increased for most households in April, making it essential to stay on top of all the support that could be received.
The Department for Work and Pensions (DWP) has announced that all benefits administered by the department have risen by 1.7 per cent, as the state pension increased by 4.1 per cent in line with the triple lock. The minimum wage has also seen a significant increase of 6.7 per cent, giving millions of workers a bumper £1,400 pay rise. As The Independent reports, these changes aim to provide relief to households struggling with the rising cost of living.
However, there is also some bad news. Household bills have seen significant rises across the board, including energy, water, and council tax. Many will also be worried about Labour’s recently-announced changes to the welfare system, which will see the rates for Universal Credit change next year, followed by the criteria to claim the Personal Independence Payment (PIP) tightening. As The Independent notes, these changes amount to £5 million in cuts.
The latest figures from millions of low-income households paint a bleak picture of the UK’s economic situation. According to research from the Joseph Rowntree Foundation, more than 1 in 5 people in the UK (21 per cent) were in poverty in 2022/23 – 14.3 million people. This comprised 8.1 million working-age adults, 4.3 million children, and 1.9 million pensioners.
Against this difficult economic backdrop, it is essential to be aware of the financial support available to households. The Independent reports that benefit payments will be going out as normal in May for the most part, but there are some exceptions due to the Bank Holidays. If you were due to get your benefit on 5 May, you will most likely get it on 2 May. If you were due to get your benefit on 26 May, you will probably get it on 23 May.
Benefit payments include Universal Credit, State pension, Pension credit, Child benefit, Disability living allowance, Personal independence payment (PIP), Attendance allowance, Carer’s allowance, Employment support allowance, Income support, and Jobseeker’s allowance. For more information on how and when state benefits are paid, visit the government’s website.
The DWP is aiming to complete the migration of all ‘legacy benefits’ to Universal Credit by January 2026. Those receiving tax credits, income support, jobseeker’s allowance, and housing benefit should have received a notice about moving to Universal Credit already. A report from Policy in Practice this year shows that nearly £23bn in benefits goes unclaimed a year – they offer a helpful calculator to work out what you might be entitled to.
Pension Payment Dates in May
The basic state pension is paid straight into bank accounts similar to how benefits are paid. It is usually paid every four weeks, with the exact day you receive it corresponding to the last two digits of your national insurance (NI) number. The Independent provides a breakdown of when you should be paid based on those numbers:
- 00 to 19: Monday
- 20 to 39: Tuesday
- 40 to 59: Wednesday
- 60 to 79: Thursday
- 80 to 99: Friday
Benefit Rates: What Has Changed?
In April, all benefits were uprated by 1.7 per cent, matching the September 2024 inflation figure. The increase will apply to all working-age benefits, including universal credit, PIP, DLA, attendance allowance, carer’s allowance, ESA and more. Meanwhile, in line with the triple lock, the State Pension has risen by 4.1 per cent – up £472 a year – matching wage growth in 2024.
Things will change slightly for Universal Credit claimants next year following Labour’s welfare announcements. Everyone receiving the benefit’s standard allowance will see a one-off above inflation rise by £7 a week from April 2026, taking it from £91 to £98. However, the rate of the additional Universal Credit health element will be frozen from 2026 at £97 until 2029/30 (although those in this group will receive the increased standard allowance).
Other Help Available
There are several other forms of support available to those struggling financially. These include:
- Budgeting advance loans: The government offers a ‘budgeting advance loan’ for people on Universal Credit who face an emergency lack of money. The loan has a maximum repayment period of two years.
- Charitable grants: If you are struggling financially, you may be eligible for certain charitable grants. There are a wide range of grants available depending on your circumstances.
- Energy provider help: A number of energy suppliers offer help for those struggling with their energy bills. These include Scottish Power, EDF, E.ON and Octopus.
- Council tax reduction: If you meet certain criteria or are on certain benefits, you may be able to apply for a discount on your council tax discount of up to 100 per cent.
- Up to 30 hours of free childcare: All working parents in the UK are currently entitled to 30 hours of free childcare for children aged 3 to 4. From 1 April 2024, this entitlement expanded to include 15 hours of free childcare for 2-year-olds.
Energy Price Cap: Is it Going Up?
Ofgem’s energy price cap has risen from £1,738 to £1,849 for April to June – an increase of 6.4. This marks the third consecutive increase in the figure, and will mean an average increase of £9.25 per month from the current rate.
Mental Health Support
For those struggling with mental health issues, there are several resources available:
- In the UK and Ireland, Samaritans can be contacted 24 hours a day, 365 days a year. You can call them for free on 116 123, email them at [email protected], or visit samaritans.org to find your nearest branch.
- Mind runs a support line on 0300 102 1234 which provides a safe and confidential place to talk about how you’re feeling.
- Disability charity Scope has a forum where people can have supportive chats to others going through the same experiences.
- NHS England offers an online mental health triage service.
The information provided in this article is based on reporting from The Independent. For more information, please visit: https://www.independent.co.uk/news/uk/home-news/dwp-benefits-cost-of-living-payments-changes-b2747765.html.
