The financial landscape in the UK has changed significantly in August 2024. These changes include new energy prices, updated bank fees, revised benefits, and tax deadlines. These changes affect how people manage their money.
Energy bills have increased due to a new price cap set by Ofgem. People who receive benefits like PIP and Universal Credit have also seen changes in how these benefits are given. Inflation and banking rules are also changing.
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 smart choices and improve your financial situation.
Universal Credit Migration
The government is moving people who get Income-related Employment Support Allowance and Child Tax Credits to a new system called Universal Credit. This will combine their benefits into one payment.
Some people will get more money with Universal Credit, but others will get less. The government says about 55% of people will be better off, but 900,000 will get less money.
The move to Universal Credit will be finished by March 2025 for most people, but it will take until 2028 for some groups.
Energy Price Cap Adjustment
The government sets a limit on how much energy companies can charge for gas and electricity. This is to help protect consumers from paying too much, especially when prices are high.
Starting on July 1st, the maximum amount people will pay for energy has gone down from £1,690 to £1,568 per year for homes that use both gas and electricity. This is a 7% decrease and will help people save some money
Banking Fees Increase
Lloyds Bank changed the cost of some of its bank accounts that come with extra perks like travel and phone insurance, starting in July. These accounts charge a single monthly fee for both banking services and these extra benefits.
- Club Lloyds Silver Account: The monthly fee will increase from £10 to £11.50. This account includes benefits like European and UK multi-trip family travel insurance up to age 65, AA Breakdown Family Cover with Roadside Assistance, and mobile phone insurance.
- Club Lloyds Platinum Account: The monthly fee will rise from £21 to £22.50. This premium account provides worldwide multi-trip family travel insurance up to age 80 and comprehensive AA Breakdown Family Cover, including Roadside Assistance, National Recovery, and Home services.
- Club Lloyds Account: This basic account has a lower monthly fee of £3, which is waived if the account holder pays in £2,000 or more monthly.
The higher fees charged by banks might make customers think about whether the services are worth the cost. Some customers might still think it’s a good deal because of the wide range of coverage and the convenience of having everything in one place. But others might look for cheaper options or decide they don’t need all the services.
Inflation Update
The ONS recently released information about how much prices have changed in the UK. This is done regularly to see how prices of things have gone up or down in the past year. The latest data showed that prices were going up at a slower pace than before, which is good news.
This is important because it might affect what the Bank of England does about interest rates. If prices keep going up at a slow pace, the Bank might lower interest rates, which could make it easier for people to borrow money.
Barclaycard Repayment Terms
Barclaycard has lowered the minimum amount that cardholders must repay each month. Previously, the minimum repayment was the highest of three amounts: 3.75% of the balance, 2.5% of the balance plus interest, or £5. However, starting from July 22, these rates have been reduced to 1% of the balance, 1% of the balance plus interest, or £5.
The passage discusses the implications of reducing minimum monthly repayments on credit card debt. By opting for lower payments, individuals may end up carrying the debt for a much longer period. While this can provide temporary relief from financial strain, it ultimately leads to paying a substantially higher amount of interest over the life of the loan.
For instance, a £1,000 balance that would normally be cleared in approximately nine years and eight months with £699 in interest charges could now take up to 19 years and three months to repay, resulting in a total interest payment of £1,655.
PIP Consultation Closure
PIP is a kind of money given to people who are sick or disabled for a long time. The government is thinking of changing how they give this money. Instead of regular payments, they might use vouchers or give it all at once.
People had a chance to share their ideas about these changes. This is important because the government will use their feedback to decide what to do next about PIP.
Financial Reminders
Payment on Account Deadline (July 31)
This deadline is for people who do their own taxes and need to pay some of their taxes in advance. This is mostly for people who work for themselves or have income that isn’t already taxed.
Tax Credits Renewal Deadline (July 31)
People who get Tax Credits need to re-apply every year to keep getting them. This is to make sure they still qualify and that their information is up-to-date. You can re-apply online, using the HMRC app, or by phone. If you don’t re-apply on time, you might stop getting Tax Credits, which could be a big problem for your money.
