Some UK households will get £1,900 extra in their bank accounts from Easter Monday in a massive Cost of Living boost. Among the changes are alterations to energy bills for British Gas, OVO, EDF, E.On and Octopus customers and households.
There are also changes to National Insurance for millions of workers, and there’ll be a shift in the Department for Work and Pensions (DWP) payment rates too. Highlighting the new energy price cap, which takes hold this week, Energy Security Secretary Claire Coutinho said: “My mission is to cut costs and get bills even lower so that families can spend their money on the things that matter most to them.
“Today we’re announcing further measures to slash bills for families and improve access to cheaper, flexible deals.” And the cut in energy bills isn’t the only Cost of Living change in the fourth month of the year, UK households have been warned.
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National Insurance cut – £900
For the second time this year, the Chancellor will cut employee national insurance by 2p to 8% from the new tax year. Combined with the 2p cut announced at Autumn Statement 2023, this will save the average worker on £35,400 over £900 year.
The cut will come into effect from 6 April 2024 and will cost £9.3bn in 2024-25, rising to £9.9bn in 2028-29, the year tax thresholds are frozen until. Chancellor Jeremy Hunt said: “The combined effects of these reductions to National Insurance means that a person on the average wage now has the lowest effective personal tax rate since 1975.”
However, this does not remove the threat of fiscal drag as tax thresholds are still frozen until 2028.
New energy price cap from Ofgem – £238
Ofgem has announced a drop in the energy price cap for the second quarter of 2024. Effective from 1st April to 30th June, the price cap, which determines the maximum rate per unit for customers’ energy usage, will decrease by 12.3% compared to the previous quarter.
For the average household paying via direct debit for dual fuel, this means a cap of £1,690 annually, resulting in a £238 yearly reduction and approximately £20 in monthly savings. This reduction brings energy prices to their lowest point since the turbulence caused by Russia’s invasion of Ukraine in February 2022.
Universal Credit – £470
There is a rise in universal credit because of the inflation rate. To save people to affects from inflation, the DWD payments are increase, and give extra credit to beneficiaries from next month. This adjustment, from 1 April, gives an extra £470 to an average of 5.5 million households.
From April 1, for the 2024-25 tax year, Universal Credit standard allowances will increase:
- From £292.11 to £311.68 per month for single people aged under 25
- From £368.74 to £393.45 per month for single people aged 25 and over
- From £458.51 to £489.23 per month for joint claimants both aged under 25
- From £578.82 to £617.60 per month for joint claimants both aged 25 and over
State Pension – £310
From April, the Full Basic State Pension will also increase in line with the ‘triple lock’, from £156.20 per week to £169.50, an increase of £13.30. The Full New State Pension will go up by £17.35 from £203.85 to £221.20.
Speaking about the benefits boosts, the government said: “In 2024/25, around 5.5 million Universal Credit families are forecast to benefit from uprating with an average annual gain for a family on Universal Credit estimated to be £470 (equivalent to an increase of around £39 per month), however gains will vary depending on the elements received by different family types.”
“Around 1.3 million pensioner households in receipt of Pension Credit will benefit from an average annual increase of £310 in their Pension Credit award.”
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
