Now that August 2024 is almost here, there have been a number of big changes in the UK economy that affect how people handle their money. These changes include new prices for energy and bank fees, as well as changes to tax dates and benefit systems. They have a big effect on both the personal and national economies.
Not only did households’ energy costs change this month because of a new Ofgem price cap, but people who get benefits like Personal Independence Payments (PIP) and Universal Credit also saw changes in how these benefits are administered and structured. The general financial situation is also about to change in a big way, with changes being made to inflation rates and banking rules.
DWP Money changes that took place in July 2024
These new changes show how important it is to plan ahead for your finances. By knowing about these changes and getting ready for them, you can better handle your money when the economy is changing. Stay up to date on these changes so you can make smart decisions and improve your financial health.
Universal Credit Migration
As part of the current switch to Universal Credit, thousands of people who used to get legacy benefits, especially those who got Income-related Employment Support Allowance along with Child Tax Credits, have been sent migration notices. This will start the three-month shift to Universal Credit. The goal of this work is to combine several benefits into a single method.
The Department for Work and Pensions (DWP) says that the cash situation of about 55% of claimants could get better, while 900,000 could see their benefits go down. For most people, the movement will be over by March 2025. For some groups, it will last until 2028.
Energy Price Cap Adjustment
The energy price cap is meant to set a maximum amount that energy companies can charge for each unit of gas and electricity, as well as a maximum daily charge. In a volatile market like this, this is meant to protect buyers from sudden jumps in energy prices.
The annual cap on energy prices has gone down from £1,690 to £1,568 for the average dual fuel family that pays by direct debit as of July 1. The cap has been lowered by 7%, which is good news for customers in light of the overall state of the economy.
Banking Fees Increase
From July on, Lloyds Bank has changed the monthly fees for some of its packed bank accounts. Travel insurance and cell phone insurance are extra perks that come with these accounts and are included in the monthly fee for banking services.
The monthly fee for the Club Lloyds Silver Account will go up from £10 to £11.50. This account comes with AA Breakdown Family Cover with Roadside Assistance, European and UK multi-trip family travel insurance up to age 65, and mobile phone insurance.
The fee for the Club Lloyds Platinum Account will go up from £21 a month to £22.50 a month. This premium account comes with AA Breakdown Family Cover, which includes Roadside Assistance, National Recovery, and Home services, as well as global multi-trip family travel insurance up to age 80.
When someone opens a Club Lloyds Account, they pay a lower monthly fee of £3. If they deposit £2,000 or more every month, the fee is removed.
Because bank fees are going up, users will have to decide if the benefits of their accounts are still worth the extra money. For some, the all-around coverage and ease of use that come with packaged services may still be a good deal. Others, on the other hand, might think about whether they can find cheaper options or whether they really need all the perks that are being offered.
Inflation Update
The ONS provided the most recent numbers on inflation. This report shows how prices for goods and services have changed over a certain time frame, in this case, the 12 months leading up to May. It is part of a regular check on inflation rates in the UK.
The Bank of England’s goal for inflation is 2%, which was shown by the most current data before the next release. This was a big drop from the high point of 11.1% in October 2022. It shows that price increases have leveled off, which could have an effect on economic strategy and consumer confidence.
Barclaycard Repayment Terms
The minimum amount that Barclaycard users must pay each month is going down. At the moment, the lowest amount that needs to be paid is the biggest of three options: 3.75% of the balance, 2.5% of the balance plus interest, or £5. But as of July 22, these rates were dropped to 1% of the balance, which is also the interest rate. This equals £5.
Longer Term Debt: If the minimum monthly payment is lowered, borrowers may be in debt for a longer time. Lower payments can help with short-term money problems, but they also make it take longer to pay off debt.
Increased Total Interest: If you take longer to pay off your debt, you will have to pay a lot more interest over the life of the loan. An average £1,000 balance that used to take nine years and eight months to pay off, with interest payments of around £699, could now take up to 19 years and three months to pay off, with interest payments rising to £1,655.
Also read:-DWP £434/Month Attendance Allowance 2024, Citizens with heart condition can claim extra money
PIP Consultation Closure
People who are disabled or sick for a long time can get PIP to help with the extra costs of life. The changes that are being considered are meant to make things run more smoothly and may change how benefits are given, from monthly payments to vouchers or one-time grants.
The public consultation ended on July 23. This is the end of the official time when people, advocacy groups, and other stakeholders can give the government feedback. This feedback is very important for making choices about how PIP payments and assessments will be handled in the future.
Financial Reminders
Due Date for Account Payment (July 31)
Self-assessment filers have until this date to make a “Payment on Account.” These are payments you make ahead of time toward your yearly tax bill. They are mostly useful for people who are self-employed or whose income is not taxed.
Due date for renewing tax credits (July 31)
By this date, everyone who gets Tax Credits needs to refresh their claim. The renewal process must be done every year to make sure that all information is correct and to check for qualifying again. You can renew your tax return online, over the phone, or through the HMRC app. If someone does not renew by the due date, their benefits could end, which could have a big effect on their finances.