Cost of Living: Low Incomes

Department for Work and Pensions written question – answered on 29th November 2022.

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Photo of Lord Taylor of Warwick Lord Taylor of Warwick Non-affiliated

To ask His Majesty's Government what steps they are taking to support low income families with the increased cost of living this winter.

Photo of Baroness Stedman-Scott Baroness Stedman-Scott The Parliamentary Under-Secretary of State for Work and Pensions

The government understands the pressures people are facing with the cost of living this Winter and is taking action to support people with their energy bills. The government’s Energy Price Guarantee, running from October 2022- March 2023, will save a typical British household around £900 this winter, based on what energy price would have been under the current price cap – reducing bills by roughly a third. This is in addition to the over £37bn of cost of living support announced earlier this year which includes the £400 non-repayable discount to eligible households provided through the Energy Bills Support Scheme.

The £37bn also includes cost of living payments worth up to £650 (paid in 2 lump sums of £326 and £324) which have targeted support at around 8 million low-income households on means-tested benefits. In addition, 6 million eligible disabled people have received a one-off disability Cost of Living Payment of £150 and pensioner households will receive a one-off payment of £300 alongside the Winter Fuel Payment from November.

For those who require additional support the current Household Support Fund, running from 1 October 2022 to 31 March 2023, is providing £421m of funding for those most in need. The devolved administrations have been allocated £79 million through the Barnett formula.

To ensure stability and certainty for households, in the Autumn Statement the Government has announced £26bn in cost of living support for 2023/24. This includes Cost of Living Payments for the most vulnerable. In 2023/24, households on eligible means-tested benefits will get up to a further £900 in Cost of Living Payments. A £300 payment will be made to pensioner households and individuals in receipt of eligible disability benefits will receive a £150 payment. Also included is the amended Energy Price Guarantee which will save the average UK household £500 in 2023-24 and raising the benefit cap by 10.1% in line with inflation.

For those who require extra support, the Government is providing an additional £1 billion of funding, including Barnett impact, to enable the extension of the Household Support Fund in England in the next financial year. This is on top of what we have already provided since October 2021, bringing total funding to £2.5 billion. In England this will be delivered through an extension to the Household Support Fund backed by £842 million, running from 1 April 2023 to 31 March 2024, which local authorities use to help households with the cost of essentials. It will be for the devolved administrations to decide how to allocate their additional Barnett funding.

In addition, we are uprating benefits for working age households and disabled people, as well as the basic and new State Pensions, all by 10.1%. We are also increasing the National Living Wage by 9.7% to £10.42 an hour from April 2023.

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