Cost of Living

Question

The Government understands the pressures people are facing with the cost of living this winter and is taking action to help. The Government's Energy Price Guarantee will save a typical British household around £900 this winter, based on what energy prices would have been under the current price cap - reducing bills by roughly a third. This is in addition to the £400 non-repayable discount to eligible households provided through the Energy Bills Support Scheme, paid over six months starting in October 2022.

For those who require additional support the current Household Support Fund, running in England from 1 October 2022 to 31 March 2023, is providing £421 million of funding. The devolved administrations have been allocated £79 million through the Barnett formula.  The Household Support Fund will continue until March 2024. This year long extension allows Local Authorities in England to continue to provide discretionary support to those most in need with the significantly rising cost of living. The Devolved Administrations will receive consequential funding as usual to spend at their discretion.

In 2023/24, subject to parliamentary approval, we are uprating all benefit rates and State Pensions by 10.1%, in order to increase the number of households who can benefit from these uprating decisions the benefit cap levels are also increasing by the same amount.

In addition, for 2023/24, households on eligible means-tested benefits will get up to £900 in Cost of Living Payments. This will be split into three payments of around £300 each across the 2023/24 financial year. A separate £300 payment will be made to pensioner households on top of their Winter Fuel Payments and individuals in receipt of eligible disability benefits will receive a £150 payment. Further to this, the amended Energy Price Guarantee will save the average UK household £500 in 2023/24.

To further support those who are in work, from 1 April 2023 subject to parliamentary approval, the National Living Wage (NLW) will increase by 9.7% to £10.42 an hour for workers aged 23 and over - the largest ever cash increase for the NLW.

We are committed to ensuring staff who engage with customers identify and signpost customers to the financial support they require. We continue to work closely with the Money and Pensions Service (MaPS), which is an Arm’s Length Body of DWP, to identify and maximise all the touchpoints where it may be appropriate to signpost our customers to the expert financial help they need.

We have also been working with MaPS to upskill some of our frontline staff to give them the confidence and skills to have those difficult and sensitive conversations with customers regarding their finances before signposting them to the most suitable organisation. This may be for help with budgeting and money management, or with debt. Customers contacting the Department’s Debt Management Team are routinely referred to this service.

The Department has a well-established process for working with individuals to support them to manage repayment of Government debt to DWP. Our priority is to negotiate affordable and sustainable repayment plans that do not cause undue financial hardship. For overpayment deductions specifically, where a person feels they cannot afford the proposed rate of deduction for an overpayment recovery they are encouraged to contact the Department’s Debt Management Team to discuss a temporary reduction in their rate of repayment or, if necessary, a temporary cessation of the deduction may be considered. When a customer is notified of an overpayment, they are advised to contact us if they would struggle to make their repayment. Customers are also notified of deductions, giving them a further opportunity to contact us to negotiate a more affordable rate.

There is no minimum amount that a customer has to pay, and we have recently extended the time period for any reduced payment to remain in place.

We also remain committed to His Majesty’s Treasury’s Breathing Space policy, which provides those with problem debt the right to legal protections from creditor action for a period of 60 days to enable them to receive debt advice and enter into an appropriate debt solution.