UK government outlines plans for £900 spring cost-of-living payments

Payments will be made in three instalments to eligible households

The UK government has detailed its special benefits payments. PA

The British Department for Work and Pensions has announced more details of its spring payments schedule for millions of households on low incomes .

The support was previously unveiled in the autumn statement, building on payments made to more than eight million people in 2022.

Eight million eligible means-tested claimants will receive £900 ($1,100), including people on universal credit, pension credit and tax credits.

Payments will start in the spring and will go directly into bank accounts in three payments, the department said.

The £900 payment will be made up of three slightly different amounts, relating to specific qualifying periods, making it simpler to determine if someone has received the correct payments, it said.

There will also be a separate £150 payment for more than six million people with disabilities and £300 for more than eight million pensioners on top of their winter fuel payments.

Exact payment times will be announced closer to the time, the government said. It said payments would be spread to ensure consistent support throughout the year.

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They will include a first cost-of-living payment of £301 made in spring 2023; a £150 disability payment during summer 2023; a £300 second cost of living payment in autumn 2003; a £300 pensioner payment during winter 2023-2024; and a third cost of living payment of £299 made in spring 2024.

But fuel campaigners say support for the most vulnerable people has not increased on what was announced last year.

“This winter we have seen over nine million adults living in Dickensian conditions in cold, damp homes," said Simon Francis, co-ordinator of the End Fuel Poverty Coalition.

“Yet despite energy bills increasing by 20 per cent from April 2023, the support for the most vulnerable announced by the government has not increased from last year.

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“In fact, with the end of the Energy Bills Support Scheme looming, households will be worse off than they were this winter.

“The government must go further to help the millions of homes in fuel poverty throughout 2023.

“This does mean more financial support, but also non-financial measures such as banning the forced transfer of households on to more expensive pre-payment meters.”

UK Work and Pensions Secretary Mel Stride said: “We are sticking by our promise to protect the most vulnerable and these payments, worth hundreds of pounds, will provide vital support next year for those on the lowest incomes.

Chancellor Jeremy Hunt said: “I know these are tough times for families across the UK who are struggling to meet rising food and energy costs, driven by the aftershocks of Covid and Putin’s war in Ukraine.

“That’s why we’re putting a further £900 into the pockets of over eight million low-income households next year.

“These payments are on top of above-inflation increases to working-age benefits and the energy price guarantee, which is insulating millions from even higher global gas prices.

“Tackling inflation is this government’s number one priority and is the only way to ease the strain of high prices, drive long-term economic growth and improve living standards for everyone.”

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The government said payments to those who were eligible would generally be automatic, so there would be no need to apply.

People should watch out for scammers sending fake cost-of-living messages trying to trick people into handing over their personal information.

Claimants who are eligible for any of the cost of living payments and receive tax credits, and no other means-tested benefits, will receive payment from HM Revenue and Customs shortly after the department's payments are issued.

Benefits, including working-age benefits and the state pension, will rise in line with inflation from April 2023, ensuring they increase by over 10 per cent.

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April will also see the biggest ever cash rise to the national living wage, bringing it to £10.42 an hour, the government said.

The 2022 support package included a £650 cost of living payment for means-tested benefit claimants, split into two payments, plus payments for people with disabilities, and pensioners.

A £400 energy bill discount for households will continue to run through March.

Recent research from accountancy giant PwC and credit app TotallyMoney indicated that 8.9 million adults are showing signs that their finances are teetering on the brink.

That means they may need to use their overdraft to cover everyday spending and essentials such as food.

They may also struggle to keep up with repayments on their borrowing in 2023.