December dates for benefits, pensions and cost of living payments

Many households still struggling and facing costly winter, even as inflation begins to ease

Joe Sommerlad
Friday 29 December 2023 08:32
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Hunt announces increases in benefits and pensions in Budget

Britain’s consumer price index measure of inflation dropped to 4.6 per cent for the 12 months to October, its lowest level in almost two years, meaning the government’s pledge to halve it from 10.7 per cent in late 2022 has been achieved well ahead of schedule, largely thanks to falling energy prices.

However, it remains well above the Bank of England’s target of 2 per cent, keeping the cost of goods and services high and households under pressure as the Christmas season approaches.

The arrival of the colder weather means cranking up the radiators to stay warm while the festive season demands increased spending on food and drink, gifts, decorations and travel at a time when many are up against it, with the Joseph Rowntree Foundation (JRF) recently reporting that as many as 2m households in the UK have found themselves forced to unplug their fridge or freezer to keep bills low, warning of “frightening” levels of hardship.

The JRF also found that 2.8m people had run into debt to pay for food and that one in six respondents to its survey had been compelled to use a community “warm room” rather than run the power at home, further evidence that the cost of living crisis is continuing to bite.

“The picture isn’t getting better for low-income families even as inflation starts to come down,” said the foundation’s chief analyst Peter Matejic.

“Too many are taking out loans to pay for food, selling their belongings and using warm banks to try and get by.”

Chancellor Jeremy Hunt has since used his autumn statement to announce a boost to benefits and a huge increase to the state pension while also detailing a fresh crackdown on some welfare claimants.

Here is a brief overview of the state financial support available to low-income families this winter and the dates on which benefits recipients can expect their money to be paid out amid the chaos and upheaval of the Christmas period.

Benefit dates impacted by holidays

The usual state support in the shape of benefits and pensions payments will be going out as always in December but, because Christmas Day, Boxing Day and New Year’s Day are all bank holidays, their delivery dates will change.

Anyone expecting to receive any of the following payments from the Department for Work and Pensions (DWP) on Saturday 23, Sunday 24, Monday 25 or Tuesday 26 December can expect their money on Friday 22 December instead and anyone expecting theirs on Saturday 30 or Sunday 31 December or Monday 1 January will receive it on Friday 29 December instead:

  • Universal Credit
  • State pension
  • Pension credit
  • Disability living allowance
  • Personal independence payment
  • Attendance allowance
  • Carer’s allowance
  • Employment support allowance
  • Income support
  • Jobseeker’s allowance

For more information on how and when state benefits are paid, please visit the government’s website.

Next support payment arriving in spring

Despite the expiration of Rishi Sunak’s Energy Bill Support Scheme at the end of March this year (an initiative that handed out £400 in monthly instalments of £66 and £67), millions of people on low incomes will receive further cost of living support from the government worth up to £1,350 in total this calendar year.

Eight million eligible means-tested benefits claimants – including people on universal credit, pension credit and tax credits – will soon receive the next £300 instalment of the cost of living package as part of a programme that began this spring, with the money going directly to bank accounts in three tranches, the DWP has said.

The payments will total £900 overall.

A separate £150 payment for more than six million people with disabilities has already gone out and an extra £300 for over eight million pensioners is coming this winter.

Here are the payment windows that have been announced so far, with more precise dates for the final instalments expected shortly:

  • £301 – First cost of living payment – already issued between 25 April and 17 May (or 2 to 9 May for people on tax credits but no other low-income benefits)
  • £150 – Disability payment – issued between 20 June and 4 July
  • £300 – Second cost of living payment – being issued between 31 October and 19 November for most people
  • £300 – Pensioner payment – November 2023
  • £299 – Third cost of living payment – during spring 2024

Energy Price Cap forecast to fall further next year

The wretched, drizzly weather we experienced in November drove down temperatures and meant the moment for switching on the central heating could no longer be delayed, reviving uncomfortable memories of last year when domestic heating bills proved such a concern for many over the course of the winter.

However, the energy crisis that drove up electricity and gas prices a year ago has largely been brought under control and the government’s Energy Price Guarantee (EPG) – introduced by short-lived prime minister Liz Truss in September 2022 to ensure households paid no more than £2,500 for their power, with the government subsidising the remainder owed to providers under Ofgem’s Energy Price Cap (EPC) – finally fell into irrelevance when the cap dropped below £2,500 in July.

At that point, with a dramatic decrease of 17 per cent from £3,280 in the second quarter to £2,074 for the third coming into effect, the average consumer reverted to paying the cap’s rate as normal, rendering a corresponding hike in the EPG to £3,000 a harmless technicality for most.

Ofgem has since announced that the EPC has been set at £1,923 for the final quarter of this year (or £1,949 for those on pre-payment plans) and will then rise slightly to £1,928 (or £1,960 for pre-payment) for the first quarter of 2024.

The recent decline in prices is reflective of recent drops in wholesale energy costs – the amount energy firms pay for their electricity and gas before supplying it to households – and, although it is a significant slide from the eye-watering rates of the last two years, the figure still remains almost £1,000 a year above pre-pandemic levels.

As for what might happen next, analysts at Cornwall Insight foresee a further fall by the time the next EPC is announced for next year’s second quarter, at which point it predicts the typical annual bill will be at £1,816.46.

The forecaster is then predicting another decline followed by a slight rise in the third and fourth quarters.

On the whole, the picture looking far more stable than it did a year ago, when the rumbles of Russia’s war in Ukraine were first being felt across global markets.

Warm Home Discount returns

Another piece of good news on household energy bills as the long nights draw in is the return of the government’s Warm Home Discount scheme, which was first introduced in 2011 and delivers a £150 cut to domestic electricity and gas bills for qualifying recipients.

A one-off discount applied automatically to your bill between early October 2023 and 31 March 2024, you are eligible for the scheme if receive the guarantee credit element of pension credit or if you are on a low income and have high energy costs.

You can read more about eligibility for the Warm Home Discount here.

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