Due to a series of global forces: economies reopening following the pandemic, Russia’s invasion of Ukraine, and more lockdowns in China, inflation is rising and therefore everyday prices.
Last week, the Chancellor Rishi Sunak set out a £15 billion package with targeted support for the most vulnerable households, including pensioners, as well as more general support for households.
This targeted support includes a £650 cost of living payment for every household on means-tested benefits; a £300 pensioner cost of living payment for every pensioner household in receipt of Winter Fuel Payment; a £150 disability cost of living payment for those in receipt of disability benefits and an extra £500 million package for local councils to support those not covered by targeted support.
Support for a wider group of households will see an increased cash grant to support with energy bills. The initial £200 rebate for every household announced in February will be doubled to £400 – and the existing clawback mechanism will be cancelled, thereby turning it into a £400 cash grant for every household.
These packages equate to £1,200 for those on the lowest incomes – around one-third of all households.
For instance, the lowest-income households on means-tested benefits will receive £650 from a one-off payment, £400 from the energy bills cash grant, and £150 from the council tax rebate – totalling £1,200, comparable to the average energy bill increase over the course of this year.
Pensioners will receive £850. A pensioner household will receive £300 through the additional Winter Fuel Payment, £400 from the energy bills cash grant and £150 from the council tax rebate – totalling £850.
Hard-working families will receive £550. Most households will receive £150 from the council tax rebate, along with £400 from the energy bills cash grant – totalling £550.
Extra revenues will be raised through a new Energy Profits Levy on oil and gas companies, with investment incentives ensuring that the more these companies reinvest, the less tax they’ll pay.
It is impossible for any government to solve every problem, but the priority is to help as many people as possible, and that’s what Rishi Sunak is doing.