ITV News consumer editor Chris Choi explains the extra cost-of-living support being paid to low-income households, with calls for the government to step in on rising food and energy bills More than eight million households will start receiving the first of two payments totaling £650 from Thursday. Rising energy bills – combined with rising prices in supermarkets and shops – continue to squeeze people, with figures showing that more and more people are buying less food to make ends meet. New support is now available to those eligible in a scheme the government hopes will ease the burden of the cost of living crisis. Here’s what you need to know. Who is eligible? People may be eligible to receive the £650 in two lump sums if they come from a low-income household on benefits or receive specific support such as: What do I need to do to claim the money? Those who qualify will be paid automatically, so they don’t need to apply and payments may appear on bills as ‘DWP Living Cost’. Payments will be made from Thursday. Credit: PA The Department for Work and Pensions (DWP) and HM Revenue and Customs (HMRC) have identified those eligible to receive Cost of Living Payment. When will the payments be made? Many people will receive the first installment of £326 between 14 and 31 July, with the second payment of £324 to follow in the autumn. For those receiving tax credits, however, the first payment will be made from autumn and the second from winter 2022. Is there any other help? Pensioner households will also receive an extra £300 to help meet rising energy costs this winter, while people on disability benefits will receive an extra payment of £150 in September. From October, households will have £400 off their energy bills. Want a quick and special update on the biggest news? Listen to our latest podcasts to find out what you need to know… People may also see an income boost to their pay packets this month as national insurance (NI) starting thresholds have increased from £9,880 to £12,570 from 6 July. However, this comes after a 1.25 percentage point rise in NI in April to help pay for health and social care. But won’t energy bills get worse? Households have been warned to expect to see their energy bills rise further in the coming months. Experts at Cornwall Insight said bills could rise from the current record of £1,971, to £3,245 in October and then to £3,364 early next year. Forecasts are based on what an average household will spend on gas and electricity in a year. A household that buys more energy could have higher bills. According to recent figures from the Office for National Statistics (ONS) covering adults in Britain from late June to early July, around nine in 10 (91%) said their cost of living had risen compared to the previous month. Energy bills are expected to rise further. Credit: PA About half (49%) of people reported buying less food when they shopped for food, and 48% said they had to spend more than usual to get what they usually buy. The vast majority of respondents had taken at least one energy-saving action in the past year. A ‘vital step’ but ‘not enough’ Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said cost of living payments were “a vital step in the right direction for those on lower incomes”. But he added: “It’s not enough to get people back to where they were before the price rises.” The Office for Budget Responsibility (OBR) said last week that geopolitical tensions, rising energy costs and long-term pressure on the country’s finances from an aging population “add a challenging outlook for this and future governments as they steer public finances . inevitable future shocks’. The OBR said: “Many threats remain, with rising inflation pushing the economy into recession, continued uncertainty about our future trading relationship with the EU, a resurgence of Covid cases, a changing global climate and rising interest rates which all continue to hang. the fiscal perspectives”. People can find more information about cost of living support at costlivingsupport.campaign.gov.uk.
