AJ Bell press comment – 3 January 2023
Laura Suter, head of personal finance at AJ Bell, comments on the government’s 2023 cost of living support payments schedule:
“Millions of people now know when they will get crucial government support to help with the cost of living this year, with the first payments coming in Spring. But the government isn’t delivering exactly what it promised, making millions of families wait longer for their payments.
“The government promised more money for the eight million people on Universal Credit and certain other benefits, increasing the payout from £650 in 2022 to £900 in 2023. But in reality, those millions of low-income households will actually get a lower payout this year, getting just £601 of the support in 2023 and having to wait until 2024 for the final £299 of help.
“Those on disability benefits will get the same £150 support and will have to wait until Summer to get the payment, while pensioners eligible for the Winter Fuel Payment will get their £300 boost at the end of the year or start of 2024. Some people will be eligible for all three payments, meaning the maximum you can claim is £1,050 in 2023.
“On top of this, everyone will see their energy bills rise again in March, as the energy price guarantee cap increases. It means the average household will pay an average bill of £3,000 – up from £2,500 currently. What’s more, the £400 of energy bill support that every household got in 2022 hasn’t been continued, which means that every household will have to find more money to pay their bills.
“All these factors together mean that households are going to have to find more money to pay for their bills this year. Inflation is expected to stop its rapid rise upwards in the coming months, but that doesn’t mean prices are going to fall – they will just stop rising so quickly – meaning higher prices are here to stay.
“The new year is a good time to sort through your finances and get them as ship-shape as possible – whether that’s moving expensive debt to a cheaper deal, starting an emergency savings pot or working out a way to bolster your income, all these moves will help to start 2023 on the right foot.”
Pensioners must claim
“Almost a million pensioner households could miss out on the extra government support this year if they aren’t signed up to receive pension credit when they’re entitled to do so. The government estimates 850,000 households are eligible for the benefit but don’t claim it, meaning they face a double whammy of missing out on the benefit, as well as the £900 cost of living support payment.
“While anyone eligible for pension credit has missed the cut-off to be able to claim last year’s £650 cost of living support, they are still in time to claim this year’s help. An added incentive for those who are eligible for pension credit but not claiming it, is that they can backdate their claim for three months, meaning they get a windfall payment for their missing benefits too.”
