The Salary Calculator

Navigating Money Challenges as Scale of UK Financial Difficulty Revealed 

by Madaline Dunn

New data from the Financial Conduct Authority (FCA) paints a troubling picture of UK finances.

According to a recent survey from the UK’s financial regulatory body, one in 10 have no cash savings, and a further 21% have less than £1,000.

As purse strings tighten and money worries mount, this week at The Salary Calculator, we’ll look at:

• What the findings reveal about the UK’s financial challenges 
• What’s driving these challenges
• Tips for navigating financial crisis
• The role employers play in supporting financial difficulties
• Proposed changes to provide support

What do the findings reveal about the UK’s financial challenges?

The FCA first started collecting data on the UK’s financial circumstances back in 2017, with its latest report presenting the body’s fourth snapshot. 

Having gathered responses from nearly 18,000 people, the survey provides a comprehensive profile of UK finances.

First, the good news.

Digital exclusion is down to 2% from 14% in 2017, and the number of people using debt advice is up (3.2% in 2024 versus 2.7% in 2022), with many finding their debts more manageable after seeking advice (61%). 

However, when it comes to financial resilience, one in four (13.1 million) are struggling, facing low savings, missed bills and heavy debt burdens. 

A total of 4.6 million people are without a financial buffer and say they would be unable to cover their living expenses for up to one week if their main household income source was lost. 

These stats are echoed by data from YouGov in March, which revealed that 56% of Britons said they’d been affected by cost of living pressures, with 22% unable to make ends meet and afford essential costs. 

“On the frontline of debt advice, we see every day how a lack of financial resilience pushes people into financial difficulty. Without rainy day savings or access to affordable credit, it can be harder to cope with life events and shocks, like falling ill, splitting up with your partner or losing your job,” commented Grace Brownfield, head of influencing and communications at National Debtline.

And without a parachute, borrowing is on the rise. The use of high-cost credit was up in 2024 (6.4%) from 2022 (5.3%), while 2.8 million (5%) said they had persistent credit card debt. 

The survey also found that more people are using Deferred payment credit (DPC), otherwise known as unregulated Buy Now, Pay Later (BNPL).

In 2024, 20 per cent of adults were found to have used DPC in the last 12 months, and 17% of all DPC users used it frequently. Among the most frequent users were lone parents (40%) and women aged 25-34 (35%).

What’s driving these challenges?

These figures come against a backdrop of rising rent, food prices and energy bills.

Indeed, in April, ONS data found that cost of living ranked as the most important issue facing the UK today. 

The same survey revealed that 72% had seen their cost of living increase in the last month — up from 66% in March — with 92% putting this down to their food shop becoming more expensive and 80% attributing this to higher energy bills. 

And amidst a number of new benefit changes, organisations have raised the alarm that, for some, tougher times could be ahead. 

In April this year, a nationwide freeze on housing benefits came into effect. At the time, national homelessness charity Crisis said the freeze represented a real-terms cut and warned it would push more people “out of the private rented sector and into homelessness.” 

Now, a new poll commissioned by The Salvation Army has revealed that, in the shadow of the freeze, 48% of those surveyed were worried an extra £100 expense would leave them unable to pay their rent or mortgage. 

Tips for navigating financial crisis

These mounting financial struggles are having a knock-on effect on people’s mental health and wellbeing, too. 

According to the FCA data, twenty-two per cent of adults disclosed that they felt overwhelmed and stressed when dealing with financial matters, a statistic which has remained unchanged since 2022. Meanwhile, 40% of those with credit or loans said that they suffer with either anxiety or stress as a result of their financial situation.

Of those suffering from poor mental health — around 9 million adults — 25% said they put off dealing with financial matters, and 18% had fallen into debt as a result of not wanting to deal with their financial situations. 

Alongside this, research from the Money and Mental Health Policy Institute shows that people with problem debt are “significantly more likely to experience mental health problems,” with 46% of those in debt also suffering from a mental health problem. 

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“If you’re struggling with your finances, the best thing to do is seek debt advice”

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“Financial challenges can deeply affect mental health, often leading to anxiety and depression,” said Norma Cassius, a money management consultant and psychotherapist. 

Cassius advised that support from organisations like StepChange and MoneyHelper can provide guidance and a “safe space to share struggles,” while highlighting the importance of creating a realistic budget, which she said is “easily done” with free budgeting tools in banking apps.

“If you’re struggling with your finances, the best thing to do is seek debt advice,” Brownfield said. “Nine in ten people we helped at National Debtline last year saw their debts reduce or stabilise, while three in four reported a positive impact on their emotional or mental health.”

But despite the benefits, the FCA survey found that embarrassment can be a barrier to accessing help. 

“It’s crucial to break the stigma around seeking debt advice, especially during the current cost-of-living crisis affecting us all. By fostering open conversations and sharing recovery stories, we can inspire hope and encourage others to seek the help they need,” said Cassius. 

What role do employers play in supporting financial wellbeing? 

According to experts, employers also play a central role in supporting financial wellbeing. 

“As the main income provider, they’re uniquely placed to offer practical financial wellbeing support, from access to affordable loans and guidance to helping people build confidence through simple steps like creating a spending plan or managing debt,” said Abby Birch, financial wellbeing and money expert at My Money Explained. 

Adding: “Without action, the risks are real: stress, lost productivity, and higher turnover. Supporting financial wellbeing isn’t just a nice-to-have; it’s essential.”

Indeed, the Chartered Institute of Personnel and Development’s (CIPD) 2025 Good Work Index (GWI) revealed the extent to which financial wellbeing and work performance are linked.

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“Supporting financial wellbeing isn’t just a nice-to-have; it’s essential”

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A survey of 5,000 employees revealed that: 

• For 31%, money worries had negatively affected their work performance
• Nineteen per cent had lost sleep due to worrying 
• Fifteen per cent said financial concerns had caused health problems like stress
• Thirteen per cent said their worries made it hard to concentrate or make decisions at work. 

The CIPD outlined that employers can support workers through this by ensuring that pay outcomes and processes are fair, paying workers as much as is affordable, becoming an accredited Living Wage Employer, and creating support mechanisms to reduce the risk of employees falling into financial difficulties. 

Meanwhile, Conor D’Arcy, Head of Research and Policy at the Money and Mental Health Policy Institute, shared with Mind that providing mental health training to line managers can be a helpful tool for recognising when employees are struggling.

Flexible working can also be beneficial, D’Arcy explained: “It means they might have time to access external help, such as visiting a financial advisor. It also might allow parents or those with caring responsibilities to better manage their time to avoid some of the additional costs these responsibilities can bring.”

What proposed changes could help provide support? 

The FCA has also outlined a number of measures aimed at supporting consumers. According to the body, this includes setting “high standards” through the implementation of the Consumer Duty, supporting the government to develop a national plan for financial inclusion, and its InvestSmart campaign, geared towards helping consumers make “better-informed investment decisions.”

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“We need to do more at a national level to prevent financial difficulty occurring”

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Meanwhile, from a policy perspective, new rules are coming into effect next year to bring BNPL in line with other types of credit. According to Emma Reynolds, Economic Secretary to the Treasury, these new rules will protect shoppers from debt traps.

Brownfield told The Salary Calculator that the government’s Help to Save scheme can be useful for building up a small safety net for those who are eligible but added that more action should be taken at a national level. 

“We need to do more at a national level to prevent financial difficulty occurring. Government must ensure the welfare system provides adequate and effective support when people experience life shocks and make building financial resilience a new national mission,” added Brownfield.

This was echoed by Richard Lane, Chief Client Officer at StepChange Debt Charity, who called for the government to expand the Help to Save scheme and work with employers to expand workplace savings schemes.

“We also want to see the Government invest in safe options for those who can’t afford to save to cope with unexpected costs, including a permanent national crisis support scheme, building on the Household Support Fund and a national no-interest loan scheme, and by working with the financial services industry to expand affordable, low-cost credit.”

Elsewhere, Helen Undy, Chief Executive of the Money and Mental Health Policy Institute, outlined that banks need to make their services accessible and offer people more tools and support to “stay in control of their finances and savings,” from spending controls to carers’ cards. 

Undy added that the organisation also wanted to see the FCA “go further” in making sure firms act on their obligations under the Consumer Duty to deliver better outcomes for customers.

 

Tags: cost of living, debt, Finances, Personal finances

Seasonal saving tips

by Madaline Dunn

With merriment and mistletoe, gingerbread houses, and Christmas lights, the festive season can be a wonderful time to get together with loved ones. However, it can also be pretty pricey, especially these days. According to research from the Trades Union Congress (TUC), for example, the cost of traditional Christmas dinner food has risen by an average of 18% in the space of a year, three times faster than wages! Meanwhile, Finder predicts that those across the United Kingdom will spend £20.1 billion on Christmas gifts this year.

With the cost of living crisis making us feel the pinch more than ever, it’s likely you’re looking for ways to scrimp and save this Christmas. So, at The Salary Calculator, we’ve compiled a list of seasonal saving tips to make things a little less stressful.

At The Salary Calculator, we’ll explore the following:

• Ways to save on Christmas food shopping,
• Guidance on how to keep presents affordable,
• Tips for low-cost transport,
• The top tips for energy saving in the season, and
• Apps that keep saving simple.

Christmas Food Shopping Saving

With so many little bits and pieces to buy for the festive dinner, it can really add up! However, it can help to know some of the cheapest supermarkets to buy your Christmas food from. Alert conducted a study into this (not including Aldi and Lidl), and found that Asda has come top of the list at £55.90 for festive essentials this year. Holding the middle ground is Morrisons, at £64.24, while Waitrose, perhaps unsurprisingly, was the most expensive at £73.81.

In a separate review by MoneySupermarket, which included Aldi, the budget supermarket was crowned the cheapest supermarket for festive bits in 2022. This was followed successively by Asda, Tesco, and Lidl.

Once you’ve decided which supermarket you’ve chosen for your Christmas shop, you can save further by employing some of the following tips:

• Go plant-based! – There’s a misconception that going plant-based is expensive, however, researchers from Quorn found that going meat-free this Christmas could save you up to 71%. Whether you buy a meat alternative, or make a nut roast, swapping out the meat components to your Christmas dinner can save a fortune, while also helping the planet and saving the animals!
• Check online codes for new shoppers & other discounts – Many supermarkets offer discount codes to first-time online shoppers, which can save you a tonne on your Christmas shopping. This can be as much as 30%. Plus, this time of year, there are lots of other discount codes available as well. Sites like VoucherCodes.co.uk can be a big help here.
• Use your leftovers, don’t throw them away – When you’ve finished your Christmas dinner and you’re full to the brim, often the thought of more food can make you a bit queasy and you may throw away the extra bits left uneaten. This leads to five million Christmas puddings, two million turkeys, and 74 million mince pies being sent to the rubbish tip while still edible. To make sure you don’t add to this, turn leftover veg into soups or bubble and squeak.
• Only buy what you’ll eat – For the above reasons, make sure to buy only what you know you’ll eat. It can be tempting to go ham on Christmas shopping and buy all the little trimmings and extras, but if you know it’s unlikely to get eaten, don’t buy it and save yourself a pretty penny.

Affordable gift giving

Gift-giving can be one of the most stress-inducing parts of Christmas and cause a lot of worry when it comes to finances. That said, there are things you can do to alleviate this stress and have a more affordable Christmas.

Agreeing to a price limit on gifts with friends and family can help to lessen the burden when it comes to gift-giving. This allows you to set a budget and stick to it.

Likewise, choosing ‘preloved’ presents can be another great way to cut the cost of Christmas. There can be a lot of pressure to buy your loved-ones new clothes, toys and ornaments, but there’s a whole world of preloved presents out there, just waiting for a new home. Charity shops can be a brilliant way to go, and you’ll be helping a good cause along the way, and not to mention the planet!

And, why not have a go at making Christmas presents this year? Whether that’s knitting a hat or making Christmas truffles or honeycomb, making your own Christmas presents can save a ton of money, be a fun activity, and add a personal touch to gift-giving.

Transport tips

Transport around the holiday can get pretty expensive, whether that’s because you’re travelling by train or you’re taking a cross-country car trip to see loved-ones. Luckily, we’ve got some travel tips to make things slightly cheaper.

One thing many people don’t think of when travelling by car, is how much extra fuel is used when the boot is packed in full. So, if you’re about to set off on your Christmas travels, remove any unnecessary items from the boot because this can end up costing you more than you’d imagine.

If you’re travelling via train, the age-old advice of booking your trains in advance has never been more true. Figures show that you can save up to 60% on your train fare by booking it early (up to 12 weeks in advance). If you’ve left it a bit late (after all, there is a lot to get done in the lead-up to Christmas), before you book an open return, see if you can buy single tickets or ‘split’ tickets to break up the journey, this can sometimes cut your ticket price by quite a bit.

Saving energy in the season

Everyone knows how expensive energy is right now, and unfortunately, prices aren’t expected to lower anytime soon. However, there are some practical ways to reduce your energy bill this Christmas.

Why not use the microwave for cooking your vegetables, rather than the hob? According to research by Quorn, carrots, sprouts, and peas can all be cooked in under three minutes, working out at around just 3p. The research team found that this is a 79% saving on using an electric hob, and a 6% saving on using the oven.

These days, it’s very much the age of the air fryer, and it’s not surprising why. Air fryers take less time to cook and use less energy – and they can be used for a whole variety of cooking. According to Jenny Tschiesche, the author of The Air Fryer Cookbook, you can cook just about anything, and even the star of the show of your Christmas meal can be popped in if the basket is at least 7-8 litres capacity.

While it might feel tempting to light up your house with an assortment of multi-colored lights and inflatable Christmas decorations, it might be a good idea to leave the lights off this year. You won’t be alone, either. According to a survey from GoCompare Energy, 27% of people are planning on putting up fewer lights this year and a sixth aren’t putting up any at all. However, if you’re overcome by the Christmas spirit, and feel the urge to light it up, purchase LED holiday string lights or timed lights that turn off automatically.

Best apps to help you budget and save

These days, there are lots of apps that can help you work out where you are with your finances and help you save.

The Too Good To Go app, for example, enables people to purchase and collect high-quality food from restaurants and supermarkets that would otherwise go to waste at an affordable price.

Meanwhile, the Emma app is a free budgeting app that tracks your subscriptions, sets up monthly budgets, tracks your payday, and makes payments within the app. Similarly, Money Dashboard links to over 90 UK banks and financial providers so you can get an overall view of your finances and budget accordingly.

Tags: cost of living, discounts, Economy, savings

Mortgage rates and house prices 

by Madaline Dunn

While Liz Truss recently announced a U-turn on one of the most unpopular items in the mini-budget, scrapping the 45p rate on the highest earners, the effect of the emergency budget has been wide-ranging and is having a huge impact on the housing market.

Breaking news about house prices, mortgage deals and interest rates have hit the headlines, with the UK in financial turmoil. In the hubbub of it all, it might be hard to know where you actually stand, and it’s understandable to be concerned about what the news means for you and your home or housing dreams.

At The Salary Calculator, we’ll explain:

• How interest rates have been affected by the recent budget and what’s going on with mortgage deals
• How house prices are faring
• What the experts are advising

Interest rates and mortgage deals

The Bank of England raised interest rates from 1.75% to 2.25% in September, and following the announcement of the mini-budget, there were predictions that the Bank of England could be forced to raise the base interest rate to 6% next summer. This resulted in nearly 1,000 mortgage packages being pulled overnight from the British market. According to Moneyfacts, 935 out of 3,596 mortgage products were wiped between Tuesday and Wednesday, doubling the record high of 462 back at the start of the lockdown.

This week, it has been announced that the UK’s largest mortgage lenders are putting deals back on the market but also raising rates once more. Moneyfacts outlined on Tuesday that the average new two-year fixed rate jumped to 5.97% – this is despite having already risen to 5.75% on Monday. Halifax, part of Lloyds Banking Group, for example, announced on Wednesday that it would be updating the rates on its homebuyer mortgage rates. The result is that its rate for a two-year fixed deal for a customer offering a 25% deposit is up from 4.61% to 5.84%, while a five-year fix with the same deposit will now stand at 5.44%, and a ten-year fix will be at 5.34%. This is similar across the board.

Alongside those trying to enter the housing market, around 1.8 million fixed deals are scheduled to end next year, meaning that many people are going to be faced with high costs when it comes to taking out a new mortgage.

Of course, the news has been devastating for millions. New research by Property Rescue, which considered the perspectives of over 1,000 UK-based homeowners, found that over a third of homeowners are worried they may have to choose between heating bills and mortgage payments. Not long ago, there were reports of people having to choose between food and heating; now, the roof above their heads is in question. The study, conducted by Perspectus Global, found that 41% will now have to turn to their savings, and 21% believe they may have to sell their homes due to skyrocketing mortgage interest rates.

Speaking to those who are concerned about their mortgage prospects, Rachel Springall, a finance expert at Moneyfacts.co.uk, said: “Seeking advice from an independent broker would be wise, especially for those borrowers who have not yet started the mortgage process and are deterred by the level of choice and much higher mortgage rates than they were perhaps anticipating.”

House prices to fall

While statistics had recently shown that average asking prices were 8.7% higher in September than a year ago, following the mini-budget fiasco, house prices are now projected to fall, at least in London, according to estate agent Knight Frank. Specifically, the agent predicted a fall in the average house price by 10% over two years. Similarly, Capital Economics predicted that “despite the reduction in stamp duty,” this is the beginning of the most “significant correction” in house prices since 2007. They added: “The sharp rise in interest rates now expected means that prices are more likely to fall by 10-15% than the 7% we previously anticipated.”

Pantheon Macroeconomics senior UK economist Gabriella Dicken, on the other hand, while projecting a more conservative fall in house prices, said it “was the start of a prolonged fall in house prices” and that she expected “house prices to fall by around 5% over the next 12 months”.

Discussing the recent impact on interest rates and mortgage deals, Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “It’s difficult to see this as anything other than a sign of things to come, as these pressures raise the risks not only that price rises stagnate, but that they begin to fall. There is the chance that we could see a significant correction in the coming months.”

What are the experts advising

With so much uncertainty around the housing market, some mortgage experts are advising those on a fixed rate with a term of 18 months or less to reach out to their broker and consider their remortgage options. Meanwhile, Martin Lewis says that people should only overpay if their mortgage rate is higher than the rate they’d earn saving: “As a simple example, £10,000 in savings at 2% earns £200 for the year, yet use it to overpay a 3% mortgage and it reduces costs by £300 for the year. Effectively overpaying is tax-free ‘saving’ at the mortgage rate, so if the rate’s higher than savings (after tax) it wins,” he said.

For those entering the housing market for the first time, Chris Sykes at Private Finance, a mortgage broker, said it’s important to make sure your finances are in order and your credit score won’t let you down. He explained: “Borrowers need to be careful in tough times, as something as small as getting a CCJ [county court judgment] by refusing to pay a £60 parking fine, or missing payments on utility bills after moving out of a property, can affect the lenders at a borrower’s disposal, and affect their interest rates if these were recent and they have little other credit presence.”

Ultimately, make sure to think things through and access independent advice before you jump into any decisions related to your mortgage and housing. Moreover, if you’re struggling with mortgage payments, reach out for help as soon as you can. The likes of  Citizens Advice, StepChange, or National Debtline can be of help here.

Tags: cost of living, house prices, housing market, interest rates, mortgage deals

The mini-budget and its impact on personal finances

by Madaline Dunn

If the headlines have got you feeling concerned, you’re not alone. It’s been an incredibly difficult few years financially, and the knocks appear to keep coming. The Conservative government’s recent mini-budget has brought in a raft of changes and sent shock waves across markets. However, the implications for personal finances have stretched much further than simply tax cuts, with the pound crashing to a record low, with, what has been called “open revolt” in markets.

At The Salary Calculator, we understand that there is power in knowledge, and the best way to equip yourself for the changes ahead is to be informed. So, below, we’ll explore:

• The changes introduced by the mini-budget,
• How the budget will impact personal finances,
• What the mini-budget means for the value of the pound and living expenses,
• The government U-turn.

The mini-budget

During his emergency Budget speech on Friday, 23 September, the new Chancellor Kwasi Kwarteng introduced the mini-budget which brought in sweeping changes to income tax, National Insurance (NI), Universal Credit, Stamp Duty, and bankers bonuses.

For income tax, from April 2023, the basic rate of income tax will be cut by 1% (from 20% to 19%). Under former Chancellor Rishi Sunak, this was meant to come in the following year. In addition to this, Kwarteng announced that the additional rate of income tax, currently applicable to earnings above $150,000, would also been scrapped, meaning that the highest earners would pay the 40% tax rate on their earnings, rather than 45% (more on that later).

According to the Treasury, these changes will result in 31 million people being better off by an average of £170 per year. However, an analysis from the thinktank The Resolution Foundation at the time of the announcement outlined that “only the very richest households in Britain” would see their incomes grow as a result of the tax changes, with the wealthiest 5% to see their incomes grow by 2% next year (2023/24).

With regards to NI, from 6 November, employers and employees will pay 1.25 percentage points less in NI. This will result in employees paying NI at 12% on earnings between £12,570 and £50,270 and 2% on anything above. Employer rates, on the other hand, will revert to 13.80%.

For those on Universal Credit, in a move that Kwarteng said would “get Britain working again,” rules will get tighter. Set to come into effect in January 2023, the new rules will impact 120,000 claimants, who will be asked to “take active steps” to increase their working hours or find better-paid jobs or have their benefits reduced.

As interest rates on mortgages are projected to reach 6%, the Chancellor has also scrapped Stamp Duty. As a result, you won’t pay any stamp duty on the first £250,000 of a property. The Treasury has outlined that 200,000 more people every year will be able to buy a home without paying any stamp duty; first-time buyers will now pay no stamp duty up to £425,000 (up from £300,000). Some have voiced concerns that this will lead to further hikes in house prices, much like when Sunak announced the Stamp Duty holiday.

In a surprising move the Chancellor has also made strides toward deregulation of London’s financial industry to “boost growth.” This has come, in part, in the form of Kwarteng scrapping the banker bonus cap. Explaining this decision, the Chancellor said: “We need global banks to create jobs here, invest here and pay taxes here in London, not in Paris, not in Frankfurt and not in New York.” Unite, on the other hand, called the move an “insult to workers,” while Positive Money, a non-profit research and campaigning organisation, called it “shameful.”

The value of the pound and its effect on day-to-day living expenses

The currency markets have reacted to Kwarteng’s mini-budget with volatility, and subsequently, the pound has plummeted. At a record low, on Monday, 26 September, the pound was worth $1.0327 against the dollar. The pound also dropped sharply when the Bank of England was forced to intervene over what was being called a “material risk” to the UK economy.

But what does this mean for consumers? Well, unfortunately, it’s not good. With the pound so weak against competing currencies, the price of imports will be much higher. This is especially bad news considering that when it comes to food self-sufficiency, overall, the UK imports more than 50% of its food, with supermarkets specifically relying on imports for 40% of their food stock, meaning that the price of groceries is set to increase yet again. Moreover, regarding travelling via car, according to the AA, a weak pound means that filling up a family car could cost an extra £7.50, and that’s not taking into consideration the fact the fuel prices are already at an all-time high.

The struggling pound will also have a staggering impact on mortgages. On Monday, the financial markets forecast that the base rate could nearly treble to 6% next year. Likewise, those on variable rates (2.2 million) will immediately feel the effect of raised interest rates.

The 45p rate U-turn

In the wake of serious backlash over plans to scrap the 45p rate for those earning over £150,000 a year during a time of rising living costs, the government has announced a U-turn. This U-turn also comes following the circulation of reports that new Chancellor Kwasi Kwarteng met with hedge fund managers for a champagne reception just after his mini-Budget.

In terms of what the U-turn means for the pound, those from the financial sector have warned that while sterling has performed better, a lot of questions still remain, considering that the 45 pence tax rate was only a small part of the unfunded tax cuts announced. As Jane Foley, head of FX Strategy, Rabobank, London, said: “UK assets, the pound and gilts are not out of the woods yet, and the British government has a lot to do to get back credibility.”

Moreover, while the U-turn seemed to bolster the pound, with sterling jumping as much as 1pc in early trading amid reports, it fell back to around $1.12 following the Chancellor stating he wouldn’t resign.

Tags: Consumer goods, cost of living, income tax, mini-budget, national insurance

The Winter Fuel Payments

by Madaline Dunn

There’s no denying that times are hard right now. On top of this, the winter months can be the most difficult time of the year, with much higher energy demands.

Fuel Poverty Action, a grassroots campaign striving to bring an end to fuel poverty, has even warned Prime Minister Liz Truss that tens of thousands will be at risk of death without serious intervention around the cost of living crisis. The campaign organisation has specifically called for a basic level of energy for every household, enough for people to maintain enough heating, lighting, cooking, and other essential services.

The government is yet to introduce this kind of scheme but has brought in a number of other financial aid schemes.

One of these schemes is Winter Fuel Payments, an initiative that was brought in back in the late nineties but has received a boost in response to the crisis. At The Salary Calculator, we’ll explore:

• What the Winter Fuel Payments are, and who is eligible,
• How much you receive and when you will receive the payments,
• How the payment will be issued,
• Whether there is additional help out there to help with the cost of living.

What are Winter Fuel Payments and who is eligible?

The Winter Fuel Payments were launched back in 1997 and were introduced in order to assist older people with fuel payments in the colder months. However, in order to be eligible for this financial assistance,  there are a number of conditions that must be met:

• You must have been born on or before September 25, 1956.
• You have to have lived in the UK for at least one day during the week of September 19 to 25, 2022.

That said, if you can not meet the second condition and did not live in the UK during the qualifying week, you could still be eligible if you can fulfil the following criteria:

• You live in Switzerland or a European Economic Area (EEA) country,
• You have a “genuine and sufficient link to the UK” (this includes having lived or worked in the UK previously or having family in the UK.

You will not be eligible, however, if any of the following applies:

• You are in hospital and have been receiving free treatment for over a year,
• You require permission to enter the UK,
• You were in prison for the whole week of September 19 to 25, 2022
• You lived in a care home between June 27 and September 25, 2022, and received certain benefits.

How much will you receive and when will you receive the payments?

When it comes to Winter Fuel Payments, you could receive between £250 – £600 to help pay your heating bills, and the amount you will receive is dependent on a number of factors, including:

• How old you are,
• Whether you live alone,
• What benefits you receive.

This year, the amount you will receive includes a Pensioner Cost of Living Payment worth between £150-£300. The amount you receive will be tax-free and paid in addition to any other Cost of Living payments. These payments will also not affect the other benefits that you’re eligible for.

How will the payment be issued?

According to the government, while most payments will be issued in November or December, pensioners should be paid by January 13, 2023. Government advice is for recipients to check their account between November and December to review whether or not they have been paid.

Although the process should take place automatically, if you have not received a payment and you are eligible, directly contact the Winter Fuel Payment centre to report the issue.

For more information about the payment scheme, head over to the Gov.uk website.

Is there other help out there?

Although this particular initiative only applies to older adults in the UK, there are further initiatives for people struggling with the cost of living crisis. This includes:

• The Energy Bills Support Scheme: A non-repayable government discount of £400 made in six instalments from October 2022 to March 2023 (£66 in October and November and £67 in December, January, February and March.
• The Warm Home Discount Scheme: A £150 discount on energy bills for those receiving certain benefits.
• Fuel vouchers: For those on prepayment metres.

For more help and advice around the cost of living crisis, visit the Citizens Advice website.

Tags: cost of living, Economy, Financial aid, Pensions, Winter Fuel Payments