8 key financial changes in August: how they will affect you

From Universal Credit new rules to interest rates, here's everything you need to know for August

There are a number of financial changes affecting families coming in August.

From many people on legacy benefits being migrated to Universal Credit, to changes in benefit payment dates and an increase in tax on alcohol, here's what you need to know.

• How to get your £300 autumn Cost of Living payout
• Struggling households given £250 FREE cash
• New Universal Credit rule affecting thousands of parents
• Thousands of low-income families to get one-off £700 payment
• 1.8 million families to get extra benefit payment

1. Tax on alcohol – 1 August

The price of some alcohol will become more expensive from 1 August, with alcohol duty rates to rise by 10.1%.

It's the biggest price rise for alcohol in decades – almost 50 years to be exact.

At the same time, a new system is being brought in that will see alcoholic drinks taxed by strength.

So how much could it cost you?

According to the Wine & Spirits Trade Association (WSTA), the price of a bottle of wine will increase by 44p and a bottle of port will cost you £1.30. This is because these drinks have a high alcohol by volume (ABV) amount.

However, drinks with a lower ABV will go down in price, so you should see 14p knocked off your 5% pre-mixed Gin and Tonic and 7p off some sparkling wines.

Heading to the pub? Then you'll be able to take advantage of the 'draught relief', which will cut alcohol duty by 9.2% for beer and cider and 23% for wines and spirits.

2. Costa Coffee loyalty points change – 1 August

The coffee chain is changing the way it offers points to customers from next month, by increasing the number of 'beans' you need in order to claim a free drink.

Currently, anyone who uses the Costa Coffee app gets 1 'bean' for every drink they purchase, or 2 if they take in a reusable cup.

After collecting 8 'beans', they'll then be able to get a free drink.

However, from 1 August, customers will need to collect 10 'beans' to be able to claim their free drink.

3. Interest rates could increase – 3 August

Bad news for households as the Bank of England will announce whether or not interest rates will rise again on Thursday 3 August.

The base rate – what the Bank of England charges other banks and lenders – increased to 5% on 22 June, with analysts expecting them to raise it once again to 5.25% or 5.5% next week.

If this does happen, you may have to pay more in mortgage fees or other fees.

4. Inflation rate – 16 August

The Office for National Statistics (ONS) will release the inflation rate – a figure used to explain how much the prices of goods has increased over time – for the 12 months to July on 16 August.

When inflation is high, it means that we've seen sharper price rises, and we're getting less for our money than before.

However, the rate fell to 7.9% – more than expected – in the 12 months to June 2023 after being stuck at 8.7% for 2 months.

So it could be good news.

5. Ofgem price cap – 25 August

Energy watchdog Ofgem will update its price cap on 25 August, and it's set to affect how much you'll be paying on energy from 1 October to 31 December 2023.

While a typical household pays an average of £2,074 a year currently, the Ofgem price cap – a limit on the amount energy suppliers can charge customers – is likely to fall at the end of the month. Analysts at Cornwall Insight have predicted this means the average household's energy bills will fall to £1,860 in October.

However, it's important to note the energy price cap isn't a cap on how much you can pay for energy. The figure shows what a household with typical usage is expected to spend over a year so you could end up paying more or less than that figure.

6. Universal Credit payment date change – 28 August

There's a bank holiday on 28 August for anyone who lives in England and Wales, and it could affect your benefit payments.

For example, if you're due your payment over the August bank holiday, you'll likely see the cash appear in your account on a different day.

Payments due to be paid on Monday 28 August will now be paid earlier – on Friday 25 August instead.

If your payment falls outside of this date, then you won't see a change to your payment dates.

7. Universal Credit migration – August

Those on the following 6 legacy benefits are being gradually migrated over to Universal Credit:

• Working Tax Credit
• Child Tax Credit
• Income-based Jobseeker’s Allowance (JSA)
• Income Support
• Income-related Employment and Support Allowance (ESA)
• Housing Benefit

If you're due to be migrated over from older legacy payments to the new system, then you'll receive a 'migration notice' in the post and given a 3-month deadline to start claiming Universal Credit.

The Department for Work and Pensions (DWP) will focus on the following areas next month:

• West Scotland
• Derbyshire
• South London
• Staffordshire
• West Yorkshire

8. PIP changes – August

Anyone who is claiming Personal Independence Payments (PIP) will be moved over to new 'light touch' reviews from August.

These will replace the huge 16-page form usually filled in by those who have to renew their benefit every 10 years.

Most people who are above State Pension age and claiming review will also be moved to the new 6-page form instead.

If you're successful in claiming the benefit, you could get between £26.90 and £172.75 per week.

Face-to-face assessments will also be scrapped for some.

What other help can I access?

If you're you're feeling the financial pinch, we've got plenty of help and advice.

Worried about the summer holidays? We've got info on all the benefits you could be entitled to here.

Lone parent? Here are all the benefits and financial support for single parents in 2023.

Or head to our Cost of Living Hub for information on what benefits and entitlements you might be eligible for, whatever your circumstances.

We've also got tips from Money Saving Expert Martin Lewis, or chat to other parents in our Netmums Forum below.

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