Watch Martin Lewis's Q&A with Rishi Sunak on the new cost of living support package – plus more info on the announcement
Watch MoneySavingExpert.com founder Martin Lewis interview the Chancellor of the Exchequer below. In the video, Martin puts his own, MSE users' and Martin's social media followers' questions to Rishi Sunak following today's announcement of a new cost of living support package.
A round-up of today's announcements
Key announcements made today include the following – click on the links below to be taken to more info on each element:
- A non-repayable £400 grant for all households to help with rising energy bills.
- A one-off payment of £650 for those on certain means-tested benefits.
- A one-off £300 top-up for pensioners who receive winter fuel payments.
- A one-off £150 payment for those on certain non-means-tested disability benefits.
- An extra £500 million to be paid into the 'Household Support Fund'.
Some may qualify for all four payments meaning a combined £1,500 per household in total. All the payments, bar the Household Support Fund, will be paid to you automatically – you don't need to actively opt in or take action to qualify. Beware of scammers trying to take advantage.
The announcements come after Martin spoke to the Chancellor earlier this week to put his key concerns to him.
If you're struggling with rising costs, see our Cost of living crisis help page for info including ways to save and how to heat the human, not the home. And if you're wondering whether to fix your energy bills, see our Is it time to fix my energy bill or should I stick on the price cap? guide.
Households to get a non-repayable £400 energy grant as 'loan-not-loan' scheme scrapped
All households in England, Scotland and Wales connected to the electricity mains (about 28 million) will get a non-repayable grant to help towards the cost of energy bills from October. This £400 payment will be spread over six months – it won't be paid as a lump sum.
Direct debit and credit users will have the money credited to their account, while those with prepayment meters will have the money applied to their meter or paid via a voucher.
It replaces the so-called flat-rate £200 'loan-not-loan' scheme announced under the Chancellor's first cost of living support package in February. Under that plan, households were due to pay back the £200 in £40 instalments taken from their energy bills over the next five years – something that had drawn criticism.
The new grants will instead be partly funded by a 25% tax on energy companies' profits, which is set to last until energy prices return to more normal levels.
The Government says equivalent support will be given to people in Northern Ireland.
See our guide on what to do if you're struggling to pay your energy bills.
Those on means-tested benefits to get a one-off £650 boost
More than eight million households across the UK on means-tested benefits (see below for a full list) will receive a payment of £650. The Department for Work and Pensions (DWP) will make the payment in two lump sums – the first from 14 July, the second in the autumn, and this will go directly into the account you receive your benefits into.
Those who receive tax credits only will receive their payments from HM Revenue & Customs, not the DWP, and these will follow shortly after the other payments.
To qualify for the first payment you'll already need to be receiving one of these benefits (or have begun a claim as of 25 May 2022 for one, which is later successful):
- Child tax credit
- Income-based jobseeker's allowance
- Income-related employment and support allowance
- Income support
- Universal credit
- Working tax credit
If you're on pension credit, to get the first payment you need to be claiming it by 24 August (as long as you were state pension age on or before 25 May). See our pension credit guide for details.
The Government says this payment is tax-free, will not count towards the benefit cap, and will not have any impact on existing benefits. Eligibility info on the second payment will be set out "in due course".
Use our 10-minute benefits check to ensure you're not missing out on vital support.
Millions of pensioners will get a £300 winter fuel payment top-up
A £300 'pensioner cost of living payment' top-up will be paid in November or December to the eight million UK households that get the winter fuel payment. For most, it will be paid by direct debit.
You'll qualify for this payment if you'll be over state pension age (aged 66 or above) between 19 and 25 September 2022, and as long as you meet certain other requirements – see Gov.uk for full details.
The winter fuel payment (including the top-up) is not taxable and does not affect eligibility for other benefits.
See our Housing and energy grants guide for full details on how the winter fuel payment scheme works, as well as info on other energy grants and freebies you may be entitled to.
Those on certain disability benefits will get a one-off £150 payment
About six million people across the UK on certain disability benefits (see the list below) will receive a one-off payment of £150 in September. This will be paid straight into the account you currently receive your benefits into and is designed to help towards the cost of specialist equipment and food, and increased transport costs.
To qualify, you must be receiving one of the following benefits (or have begun an eventually successful claim for one, as of 25 May 2022):
- Armed forces independence payment
- Attendance allowance
- Constant attendance allowance
- Disability living allowance
- Personal independence payment
- Scottish disability benefits
- War pensioners' mobility supplement
The Government says these payments are exempt from tax, will not count towards the benefit cap, and will not have any impact on existing benefits.
And you can still qualify for the £150 payment if you've swapped disability benefits for mobility aids under the Motability Scheme – though details on how this will work in practice have yet to be confirmed.
See our guide for 31 MoneySaving tips for disabled people.
Extra £500 million to go into the 'Household Support Fund'
An extra £500 million will go into the 'Household Support Fund', which will also be extended from this October to March 2023. It means that the total amount of support provided through this fund is now £1.5 billion since October 2021.
The scheme is designed to help those in need with payments towards the rising cost of food, energy and water bills. It's up to local authorities in England, and to the devolved Governments in Northern Ireland, Scotland and Wales to decide how to spend the cash.
Watch Martin's instant reaction to the support package
See the video directly below for Martin's instant reaction to the support package:
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