With 2 out of every 5 UK households having to choose between heating their homes and feeding their families, all eyes have been fixed on Chancellor Rishi Sunak’s plans to tackle the soaring cost of living. His announcement on the 26th of May included a range of measures aimed at easing the pressure we’re all feeling, with a particular focus on helping the most vulnerable.

So, what does it all mean in real terms? Here’s a quick breakdown of the main headlines:

A £400 energy grant for pretty much everyone

Remember that flat £200 “loan” that every household in England, Wales and Scotland was set to get? Well, that’s gone straight out the window in favour of a £400 grant. This is actually a pretty big change in the government’s position. Not only is the amount of money doubling, but it doesn’t even have to be paid back. The cash will either go straight into your account or, if you’re on a pre-payment energy deal, you’ll get it either credited to your meter or as a voucher.

Keep in mind that you won’t be getting the whole £400 at once. The payments will be spread out over 6 months. With energy bills expected to leap up by another £800 in October when the price cap gets reviewed, this new grant will only go so far. Still, it’s a fairly big step up from the previous plans.

Another £650 for those most in need

For the 8 million or so households on means-tested benefits like Universal Credit or Child Tax Credit, another £650 will be coming in the form of 2 lump-sum payments. You could be eligible for this support if you’ve been getting:

  • Universal credit
  • Child tax credit
  • Income support
  • Income-based jobseeker's allowance
  • Income-related employment and support allowance
  • Pension credit
  • Working tax credit

The first part of the payment will be going out in July, with the rest to come later in the autumn. Crucially, the money will be paid tax-free, and won’t count toward your benefit cap.

A £300 winter boost for pensioners

Some time toward the end of the year, pensioners will be receiving a one-off top-up of £300 on top of the Winter Fuel Allowance. The standard rules for eligibility will still apply, which you can find here.

While we’re talking about pensions, it’s worth noting that the “triple lock” is coming back as of next year. This is the rule that ensures pension payments yearly rise by the highest of:

  • Inflation
  • The average increase in wages
  • 5%

The lock was suspended during the COVID-19 pandemic, due to the exploding average wage boost that came with people returning to work from furlough.

An extra £150 for people on disability benefits

In September, about 6 million people receiving certain kinds of disability benefits will qualify for another one-off payment of £150. The benefits that qualify are:

  • The Armed Forces Independence Payment
  • The War Pensioners' Mobility Supplement
  • Attendance allowance or Constant Attendance Allowance
  • Disability living allowance
  • Personal Independence Payment
  • Scottish Disability Benefits

This extra £150 can stack with the £650 you may be eligible for if you get other benefits – and again, it’s tax-free and won’t affect your benefit cap.

Another half a billion pounds for the Household Support Fund

The Household Support Fund was designed to help English councils give more support to struggling families across the country. The councils themselves decide how to use the money, but the total has now risen to £1.5 billion.

Overall, this set of payments and packages is likely to have a decent impact on UK households currently suffering through the steepest real-terms drop in income for half a century. However, the cost of living is still rising and one-off top-up payments can only take you so far.

Check If You're Due a Tax Refund to Cover More Costs

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