Starting Tuesday, eight million households on means-tested benefits in the UK will receive the final cost-of-living payment, aimed at helping with rising food and energy costs. This £299 payment is the last installment of a three-part series totaling £900 and will be deposited directly into recipients’ bank accounts by February 22, without requiring an application. The cost-of-living support package, amounting to £104 billion, was introduced in 2022, with the initial announcement by then Chancellor Rishi Sunak for a £650 payment in two installments. Subsequently, Chancellor Jeremy Hunt increased the total to £900 spread over three payments in November of the same year.
Over 680,000 households in Scotland, more than 400,000 in Wales, and 300,000 in Northern Ireland on means-tested benefits will benefit from this final payment. While the government currently has no plans to extend the scheme, charities have urged for additional support.
Despite a recent easing of the inflation rate, which had reached double digits, there was an unexpected rise to 4% in December – the first increase in 10 months. The high cost of household gas and electricity continues due to an energy crisis triggered by Russia’s invasion of Ukraine in late February 2022. Additionally, a shortage of properties on the market has led to a spike in rents.
Morgan Wild, the interim director of policy at Citizens Advice, emphasized that while the cost-of-living payments provide some relief, they are only temporary. Long-term commitments are needed to address the root causes of financial struggles, including high energy bills and unaffordable housing.
A report by the cross-party Commons work and pensions committee in November noted that while the cost-of-living payments were welcome, they were insufficient to tackle the magnitude of the problem and only provided a “short-term reprieve” for those dealing with high inflation and bills.
Work and Pensions Secretary Mel Stride commented on the final payment, stating that with the economy turning a corner and inflation decreasing, millions of vulnerable households are receiving a significant cash boost. However, the call for long-term solutions and sustained support remains, acknowledging the ongoing challenges faced by individuals dealing with financial difficulties.