Several significant changes will occur as the UK implements new policy. These changes will impact how people manage finances. Staying informed about the latest changes in financial planning is essential. This includes updates to bank fees, energy costs, tax deadlines and shifts in benefits systems. This is a comprehensive look at the changes that are coming, and how they may affect you.
Table of Contents
Benefit System Overhaul
In June 2024, those who receive old-style benefits such as income-related Child tax credits and Employment Support Allowances will start the transition to Universal Credit. This transition will take place over a period of three months in order to streamline the benefit system and merge multiple benefits into one.
- Potential Impact :
- Around 55% of recipients could see their payments increase.
- Around 900,000 could get less money.
- Timeline :
- Transition should be completed by March 2025 for most groups, and by 2028 for some.
Energy Price Cap Reduction
The energy price cap will be reduced from July 1, 2024. This is to limit the maximum amount that energy companies are allowed to charge. The average household using dual fuels and paying via direct debit can expect to see their bill drop from £1,690 down to £1,568. This is a 7% cut in order for them get relief from the high cost of energy.
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Bank Fees Increased
Starting in July, Lloyds Bank is increasing the monthly fee for certain packaged accounts.
- Club Lloyds Silver account: Monthly fees will increase from £10 up to £11.50.
- Club Lloyds Platinum account: Monthly fees will increase from £21 to £22.50.
- Club Lloyds account : The monthly deposit of £2,000 or greater waives the basic fee.
Evaluating Value
The customer must determine if the accounts are still worth it. Others may choose to look at more affordable options, but others will find that the added benefits are worth it.
Inflation and Interest Rates
On July 17, 2024, the Office for National Statistics (ONS) will release the latest inflation figures. Inflation is the increase in the price of goods and services during the last year. Inflation recently reached the Bank of England target of 2%. This is down from an all-time high of 11.1%, which occurred in October 2022. This stabilization may affect consumer confidence as well as economic policies.
Bank of England’s response :
- If inflation stays around 2% the Bank could lower interest rates to make borrowing more affordable and stimulate economic activity.
Changes to Credit Card Payment
Barclaycard is reducing the monthly minimum payments that cardholders are required to make starting July 22, 2024. The new minimum payment will be the highest:
- 1% of the total balance
- 1% plus interest of the total balance
- £5
Long-term implications
Lower payments may reduce financial stress in the short term, but they can also lead to longer repayment terms and higher interest rates. A £1,000 balance, for example, that took nine years and eight month to pay off with £699 interest now takes 19 years and three weeks with £1,655 interest.
Policy Changes
Personal Independence Payment (PIP) may be changed by the government, possibly moving to vouchers instead of regular payments or changing payment methods. The consultation period on these changes ends on July 23, 2024. The final chance for people to give input that will affect the final decision is now.
Tax Deadlines
- Taxpayers who use self-assessment must make an advance payment toward their annual bill by July 31, 2019. Self-employed people and those who have untaxed earnings are most affected.
- To ensure accurate information and eligibility, recipients must renew their claims by the end July. If you fail to renew, your benefits could be terminated and this can have a negative impact on your financial situation.
Stay Informed
The importance of planning and staying informed is highlighted by these upcoming changes. Visit our website regularly to stay informed about these changes and improve your financial health.
FAQs
Who will be transitioning to Universal Credit in the future?
Recipients who received old-style benefits such as income-related Child tax credits and Employment Support Allowance.
When will energy prices be capped?
After July 1, 2024
What are the new charges for Lloyds Bank Accounts?
Club Lloyds Silver: 11.50 PS/month; Club Lloyds Platinum 22.50 PS/month
What will Barclaycard do to the minimum payment?
The minimum payment will be the higher of 1% plus interest or PS5, or 1% plus interest.
When is the deadline for taxpayers who self-assess?
July 31, 2024