Jeremy Hunt will announce a three-month extension to the energy price guarantee in today’s Budget.
The guarantee, which currently caps bills for the average household at £2,500 a year, will now remain at that level until June. It was due to expire on 1 April.
The increase would have doubled the number of people unable to afford their energy bills from one in 10 to one in five. However, households will still see their bills increase, as the £400 grant that has been paid in monthly instalments since October has now come to an end.
The Chancellor is not expected to announce any further grants in the Budget. He appeared to rule out more support last month, claiming during a visit to a London science facility that there was no space for a “major new initiative” to help households with energy bills.
“We constantly keep the help we can give families under review,” he said. “But if you’re saying: ‘Do I think we’re going to have the headroom to make a major new initiative to help people?’, I don’t think the situation would have changed very significantly from the Autumn Statement, which was just three months ago.”
However, three schemes that were launched last year to support low-income households, disabled people and pensioners have already been extended.
What cost of living payments are there in 2023?
The following support has been announced for 2023:
- £900 payment for more than eight million eligible means-tested benefits claimants
- £150 for more than six million disabled people
- £300 for more than eight million pensioners on top of their winter fuel payments
Here is a breakdown of each one, and when they are expected:
£900 low-income payment
This will be paid to people who receive the following benefits:
- universal credit
- income-based jobseeker’s allowance
- income-related employment and support allowance
- income support
- pension credit
- working tax credit
- child tax credit
More than eight million households will receive the payment, the Department for Work and Pensions (DWP) has said.
The money will be paid in three separate payments over the course of the financial year, starting in the spring. Exact payment dates will be announced closer to the time, but are spread across a longer period to ensure a consistent support offering throughout the year, the DWP said. DWP has issued the following guideline:
- £301 – first payment during spring 2023
- £300 – second payment during autumn 2023
- £299 – third payment during spring 2024
That means people will receive £601 this year, with the remaining £299 in 2024. The slightly different payment amounts are to make it easier for DWP and HMRC to track which grants people have received, in order to minimise the risk of fraud.
Money Saving Expert’s Martin Lewis has predicted the first payment will be made shortly after 6 April – the beginning of the new financial year, with the second instalment in October or November. He thinks the final payment will be made before 6 April, 2024.
Claimants who are eligible for any of the payments and receive tax credits, and no other means-tested benefits, will receive payment from HMRC shortly after DWP payments are issued, as was the case with the previous £650 grant.
The payments will be tax-free, will not count towards the benefit cap, and will not have any effect on existing benefit awards.
Mel Stride, the Work and Pensions Secretary, said: “These direct payments will help people right across the UK over this year and the start of the next, as we continue to provide consistent, targeted and substantial support for the most vulnerable.
“Our wider support package, including the energy price guarantee, will ensure every household is being helped through this challenging period of high inflation, caused by Putin’s illegal war and the aftershocks of the pandemic.”
£150 disability payment
A £150 disability payment will be awarded to people who receive any of the following:
- disability living allowance
- personal independence payment
- attendance allowance
- Scottish disability benefits
- Armed Forces independence payment
- constant attendance allowance
- war pension mobility supplement
The payment will be made in summer 2023. The payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.
£300 pensioner payment
DWP is extending the £300 boost to the winter fuel payment that was issued in 2022. It will be paid in winter 2023-24. The winter fuel payment, also referred to as a “heating allowance”, is an annual tax-free payment from the DWP for older people.
Anyone who is eligible normally receives £100-£300 each year. The amount you get depends on when you were born, your living situation and the type of benefits you receive. The £300 comes on top of this.
You don’t typically have to apply for the winter fuel payment if you are eligible. You should receive the money automatically. If you have not had the payment before, you will need to claim if any of the following apply:
- You do not get benefits or a state pension
- You only get housing benefit, council tax reduction, child benefit or universal credit
- You get benefits or a state pension but live in Switzerland or a European Economic Area country
- You get an adult disability payment from the Scottish Government
You can find more information about the winter fuel payment here.
