In August 2024, there were big changes in how people in the UK handle their money. These changes include new prices for energy, different bank fees, changes in government benefits, and new tax deadlines. This means that how people manage their money has changed a lot, both for individuals and for the country.
This month, people will notice changes in their energy bills because of a new price set by Ofgem. Also, people who get money from the government, like PIP and Universal Credit, will see how they get this money change. And in general, the way money works will change too, with prices going up and banks having new rules.
DWP Money changes that took place in July 2024
These new changes show how important it is to plan your finances ahead of time. If you know about these changes and get ready for them, you’ll be better at managing your money when the economy changes. Stay up-to-date on these changes so you can make good choices and have strong finances.
Universal Credit Migration
The government is moving people who get Income-related Employment Support Allowance and Child Tax Credits to Universal Credit. This will make it easier for them to get help from the government. They will have three months to switch over to Universal Credit.
The DWP says that about 55% of people who claim benefits will get more money, but 900,000 people will get less. The changes will be finished by March 2025 for most people, but some groups will have to wait until 2028.
Energy Price Cap Adjustment
The government has set a limit on how much energy companies can charge for gas and electricity. This is to help protect people from paying too much, especially when prices go up quickly.
Starting in July, the price cap went down from £1,690 to £1,568 per year for homes that pay by direct debit. This is a 7% drop and will help people save some money
Banking Fees Increase
loyds Bank has changed the monthly fees for some of its bank accounts that come with extra benefits like travel insurance and phone insurance. These benefits are included in the monthly fee for the bank account.
Club Lloyds Account Changes:
Basic Account: The monthly fee is £3, but it’s free if you put in at least £2,000 every month.
Silver Account: The monthly fee is going up from £10 to £11.50. It still comes with travel insurance, roadside assistance, and phone insurance.
Platinum Account: The monthly fee is going up from £21 to £22.50. It has better travel insurance and more roadside assistance.
Banks are charging more money for their accounts. People should think about whether it’s still worth it to pay these higher fees. Some people might think it’s okay because they get a lot of services. But others might look for cheaper banks or decide they don’t need all the things the bank offers.
Inflation Update
The ONS just told us about the new inflation numbers. This is part of checking how much things cost in the UK. It shows how prices changed in the past year, up to May.
The latest numbers before the new report came out said that inflation was now at the Bank of England’s goal of 2%. This was a big drop from the highest point of 11.1% in October 2022. This means that prices are not going up as fast anymore, which could affect what the government does about the economy and how people feel about the economy.
The July inflation numbers are important because they affect what the Bank of England does about interest rates. If inflation stays around 2%, the bank might rethink its current interest rate of 5.25%. A lower inflation rate could mean the bank can lower interest rates, making borrowing cheaper and helping the economy grow.
Barclaycard Repayment Terms
Barclaycard is making it easier for cardholders to pay back their debt. Starting from July 22, the minimum amount that cardholders have to pay each month is lower than before. Previously, the minimum payment was the highest of three options: 3.75% of the balance, 2.5% of the balance plus interest, or £5. Now, the minimum payment is the highest of these three options: 1% of the balance, 1% of the balance plus interest, or £5.
- Paying less each month can keep you in debt for a longer time. While it might feel good to pay less right now, it means you’ll be paying off your debt for longer.
- The main point of the passage is that extending the repayment period for a loan can lead to a significant increase in the total interest paid over the life of the loan.
- Here is a paraphrased version of the passage in simple English:
- If you take longer to pay back a loan, you will end up paying a lot more in interest. For example, a £1,000 loan that would normally take about 9 years and 8 months to pay off with £699 in interest could take up to 19 years and 3 months to pay off with £1,655 in interest.
- In other words, the longer you take to pay back a loan, the more expensive it will be in the long run.
PIP Consultation Closure
PIP is a type of money given to adults who are sick or disabled for a long time to help them with extra costs. The government is thinking of changing how PIP is given, maybe by using vouchers or one-time payments instead of regular payments.
People had a chance to give their opinions on these changes until July 23rd. This feedback is important for deciding how PIP will be handled in the future.
Financial Reminders
Payment on Account Deadline (July 31)
This deadline is for people who do their own taxes and need to make “Payment on Account.” These are advance payments towards your yearly tax bill. This is mostly important for people who work for themselves or have income that isn’t taxed.
Tax Credits Renewal Deadline (July 31)
If you get Tax Credits, you need to renew your claim by [date]. This is something you have to do every year to make sure you still qualify and that your information is up-to-date. You can do it online, on the HMRC app, or by phone. If you don’t renew on time, you might stop getting Tax Credits, which could be bad for your finances.
