Low-income households set to receive new cost-of-living payments from spring

Millions of households on low incomes will receive fresh cost-of-living support from this spring, according to the Department for Work and Pensions (DWP), which has announced further details on the payments schedule.

The next round of support for households was previously unveiled in the autumn statement, building on payments made to more than eight million people in 2022.

The new £900 cash support for over eight million eligible means-tested benefits claimants, including people on Universal Credit, Pension Credit and tax credits, starts in the spring and will go directly to bank accounts in three payments, the DWP said.

The £900 payment will be made up of three slightly different amounts, relating to specific qualifying periods, making it simpler to determine if someone has received the correct payments, the department added.

There will also be a separate £150 payment for more than six million people with disabilities and £300 for over eight million pensioners on top of their Winter Fuel Payments.

Exact payment windows will be announced closer to the time, the Government said, adding that payments will be spread to ensure consistent support throughout the year.

They will include a first cost-of-living payment of £301 made in spring 2023; a £150 disability payment during summer 2023; a £300 second cost-of-living payment in autumn 2003; a £300 pensioner payment during winter 2023/4; and a third cost-of-living payment of £299 made in spring 2024.

However, fuel poverty campaigners have argued that support for the most vulnerable people has not increased on what was announced last year.

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “This winter we have seen over nine million adults living in Dickensian conditions in cold damp homes.

“Yet despite energy bills increasing by 20% from April 2023, the support for the most vulnerable announced by the Government has not increased from last year.

“In fact, with the end of the Energy Bills Support Scheme looming, households will be worse off than they were this winter.

“The Government must go further to help the millions of homes in fuel poverty throughout 2023.

“This does mean more financial support, but also non-financial measures such as banning the forced transfer of households onto more expensive pre-payment meters.”

Work and Pensions Secretary Mel Stride said: “We are sticking by our promise to protect the most vulnerable and these payments, worth hundreds of pounds, will provide vital support next year for those on the lowest incomes.”

Chancellor Jeremy Hunt added: “I know these are tough times for families across the UK who are struggling to meet rising food and energy costs, driven by the aftershocks of Covid and Putin’s war in Ukraine.

“That’s why we’re putting a further £900 into the pockets of over eight million low-income households next year.

“These payments are on top of above-inflation increases to working-age benefits and the energy price guarantee, which is insulating millions from even higher global gas prices.

“Tackling inflation is this Government’s number one priority and is the only way to ease the strain of high prices, drive long-term economic growth and improve living standards for everyone.”

The Government said payments to those who are eligible will generally be automatic, so there will be no need to apply.

People should watch out for scammers sending fake cost-of-living messages attempting to trick people into handing over their personal information.

Claimants who are eligible for any of the cost-of-living payments and receive tax credits, and no other means-tested benefits, will receive payment from HM Revenue and Customs (HMRC) shortly after DWP payments are issued.

Benefits, including working-age benefits and the state pension, will rise in line with inflation from April 2023, ensuring they increase by over 10%.

April will also see the biggest ever cash rise to the National Living Wage, bringing it to £10.42 an hour, the Government said.

The 2022 support package included a £650 cost-of-living payment for means-tested benefit claimants, split into two payments, plus payments for people with disabilities, and pensioners.

A £400 energy bill discount for households will continue to run through March.

Recent research from accountancy giant PwC and credit app TotallyMoney indicated that 8.9 million adults are showing signs that their finances are teetering on the brink – meaning that they may need to use their overdraft to cover everyday spending and essentials such as the food shop.

They may also struggle to keep up with repayments on their borrowing in 2023.