Hey my Lovelies,
It’s been a while since I’ve done an infromative type of blog post, but I feel this is a very important one as it is a global crisis and the closer we get to winter the more difficult it will be to manage. This ‘Cost of Living‘ post will be uploaded in three parts. This post will explain what the cost of living crisis is and what goverment support you are possibly entitled to. In the second post I will share some tips that we can all implement to help stay financially savvy during the cost of living crisis. The last post will be tips for staying warm during winter. So stay tuned!
In this article:
- What is a ‘Cost of Living Crisis’?
- Who will the Cost of Living Crisis impact?
- Entitled support available
What is a ‘Cost of Living Crisis’?
Since late 2021 we have been hearing non-stop reports of a cost of living crisis and by the time we entered 2022 we started feeling the hardcore effects of these dreaded reports. If you’re not exactly sure what the Cost of Living Crisis is then you may have a misconception that it is only a financial problem that has hit the UK and it’s residents but with research you’ll find that this living crisis has infact affected and had global impact, making many households universally worse off. So, what is a Cost of Living Crisis and how does it affect you?
The cost of living crisis was caused by higher inflation, and low wage growth which has made the gap between expense and affordibility for each household much larger and noticeable even with the bare neccessities.
It is being caused predominantly by high inflation outstripping wage and benefit increases and has been further exacerbated by recent tax increases also.
The crisis was exacerbated by short-term factors, such as the Ukraine & Russian war, but the pressure on living standards has long-term trends, such as low productivity growth and increased market power for various companies and organisations.
This Cost of Living crisis has left people struggling to afford everyday neccesities causing households to cut back on food and car journeys. A BBC commissioned survey in June 2022 found that more than half (56%) of the 4,011 people asked had bought fewer groceries, and the same proportion had skipped meals. Many people have cut spending on clothes and socialising too, so if they weren’t viewed as a bonus in some households they certainly are now.
Who will the Cost of Living Crisis impact?
This Cost of Living Crisis has and will impact literally everyone. Those already in low income households, are chronically ill and/or disabled, those with child/ren, single parent households will unfortunately feel the most impact of this living crisis. Tenants are also likely to experience the impact of the living cost crisis more severely than homeowners. So for those of us renting privately from landlords who are competing with tax inflation and the housing market are most likely to be faced with increased monthy rent (by 3% or less, per year). It is important, however, to rememeber that as a tenant you have the right to be communicated with properly and well in adnvance in official writing. Various energy providers reported the energy price cap would be around £2,800 a year, in June. In July it went to £3,200 a year and as of latest reports it could be heading towards 5,000 by spring time! The Government announced a Energy Price Guarantee to where your specific energy provider will share information on the new Energy Bills Support Scheme and how it will affect you individually or as a household.
For those who will be affected most there are steps you can take to reduce the impact as well as help and support that may be available to you, including debt prevention and management, energy efficiency advice, and financial assistance programmes.
Entitled Support Available
To help with the cost of living crisis, the government has announced several measures: One-off payments to low-income households, pensioners and those receiving disability benefits. Around 28 million UK households will get £400 off their domestic energy bills.
There is financial relief avaible to help with energy bills but you will have to check with Citizens Advice or with your specific housing if you qualify for some of these financial relief schemes. You may find that you are entitled to more than one, in which case it would be really beneficial to find out as soon as posible so as to get all the support you need to get through this winter.
Cost of Living Payment A
WHO: Everyone
WHAT: £400 paid in instalments
WHEN: October 2022-March 2023
HOW: Automatic or via a voucher if you have a non-smart pre-payment metre
Cost of Living Payment B
WHO: Anyone in receipt of disability support
WHAT: £150
WHEN: September 2022-October 2022
HOW: Automatic if you qualify for disability support
Cost of Living Payment C
WHO: Anyone in receipt of government support
WHAT: £650 in 2 parts
WHEN: July 2022-October 2022
HOW: Automatic but check if you qualify for government support – turn2us.org.uk
Household Support Scheme
WHO: Everyone
WHAT: Variable
WHEN: Ongoing
HOW: Contat your local council to see if you’re eligible to apply
Warm Home Discount
WHO: Anyone in receipt of governement support
WHAT: £140
WHEN: October 2022-March 2023
HOW: Contact your energy supplier to see if you’re eligible for the discount
Cold Weather Payment
WHO: Anyone in receipt of governement support
WHAT: £25 for each 7 day period that temperatures drop below freezing
WHEN: November 2022-March 2023
HOW: Automatic
To expand on the Energy Bills Support Scheme Discount
One of the additional measures the UK Government has previously announced to help households cope with rising costs is a £400 energy bill discount, known as the Energy Bills Support Scheme. This is how it will work:
- Energy suppliers will apply the discount to each household they supply electricity to in monthly instalments over a period of six months starting from October 2022.
- If they supply your electricity at the beginning of each month, they’ll apply the discount in October and November and then from December to March 2023.
- The discount will be issued as a refund to your bank account after your energy provider has collected your monthly Direct Debit for an energy bill. If they’re unable to collect the Direct Debit payment, they’ll apply the full discount to your energy account, so you won’t miss out.
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Additional places to get advice and support with bills and household expenses
In the next article I will discuss simple ways to save energy and stay financially savvy during the cost of living crisis.
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Thanks for stopping by.
Laura,
XOXO
Laura Spoonie Blogs 