8 million households to receive £900 cost of living payment

Families on low-incomes who are on benefits will get three cost of living payments worth £900 in total and this will be paid out during 2023/4

From rising energy bills and changes to Universal Credit to ‘stealth’ taxes and a new cost of living payment … the 2022 Autumn Statement included lots of headlines that will impact families.

Delivered by Chancellor Jeremy Hunt, we’ve rounded up how the budget affects YOU. 

1. £900 cost of living payment

Households on means-tested benefits will get a new £900 cost of living payment to help with soaring costs.

This is expected to be paid to 8 million people.

See the exact payment dates here for all three payments.

2. Energy bills

Energy bills have soared in this cost of living crisis. And they are expected to remain high next year.

Mr Hunt said: 'From April, we will continue the Energy Price Guarantee for a further 12 months at a higher level of £3,000 per year for the average household.

'With prices forecast to remain elevated through next year, this will still mean an average of £500 support for every household.'

3. Changes to Universal Credit

More than 600,000 people on Universal Credit will be asked to work with a work coach. This, says Mr Hunt, is ‘so that they can get the support they need to increase their hours or earnings.’

Plans to move people from Employment and Support Allowance onto Universal Credit has been moved back to 2028.

4. National Living Wage rise

This will be increased from £9.50 an hour to £10.42 from April. This works out at an annual pay rise of over £1,600 for a full time worker and will impact over two million workers.

5. Benefits rise

Meanwhile millions of people on benefits will have their payments increased by 10.1% in line with inflation. Martin Lewis tweeted:

'I am very pleased that both benefits and the state pension are being increased by the 10.1% September inflation rate.

'It only happens from next April, and it will still be hard for many, but if it was less than this it would've been devastating.'

6. Income tax freeze.

Millions of households will be worse off after the freeze on income tax thresholds was extended until 2028. It was due to finish in 2026.'

This so-called 'stealth tax means millions of people will have to pay more tax as their wages rise. This means someone earning £33,000 a year (the UK average salary) will pay £2,557 more income tax over six years.

Martin Lewis previously explained that freezing thresholds means no matter what you earn, as your earnings increase, a bigger proportion of your earnings goes in tax.

7. Council tax rises

Average council tax bills will soar past £2,000 for the first time in April after the Chancellor announced he will relax the cap on town, county and city halls.

This means Council Tax could rise by 4.99%. Average Band D council tax bills are already £1,966, but could now be more than £2,000 in the Spring.

8. Boost for schools

Mr Hunt revealed he is increasing the school budget and investing an extra £2.3bn in schools for the next two years. He said:

‘Our message to heads, teachers and classroom assistants today is 'thank you for your brilliant work, we need it to continue and in difficult economic circumstances.'

9. Rent controls

An increase in social rents will be capped to a maximum of 7% in 2023/24. This will work out at a saving for the average tenant of £200 next year.

What do you think of today's Autumn Statement? Share your thoughts in our forum.

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