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Final Cost of Living Payment Distributed to Eight Million Households on Means-Tested Benefits

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Final Cost Of Living Payment Distributed To Eight Million Households On Means Tested Benefits

Eight million households on means-tested benefits will receive their final cost of living payment to help with high food and energy bills from Tuesday. The last of three instalments that totalled £900 will go directly into people’s bank accounts between now and 22 February, without the need to apply. It is part of the government’s £104bn cost of living support package.

The cost of living payment will benefit more than 680,000 households in Scotland, more than 400,000 in Wales, and 300,000 in Wales on means-tested benefits. The payments were initially announced by Rishi Sunak, the then Chancellor, who announced a payment of £650 in two instalments in May. Jeremy Hunt, the Chancellor in November of that year, increased the payment.

The government has no current plans to extend the scheme, but charities have urged it to announce fresh support. While the inflation rate has eased considerably from double digits, inflation remains a concern in the first increase for 10 months, and the cost of household gas and electricity remains high due to an energy crisis caused by Russia‘s invasion of Ukraine in late February 2022. Rents have also spiralled amid a shortage of properties on the market.

Morgan Wild, the interim director of policy at Citizens Advice, said, “”Increasingly, people coming to Citizens Advice are living on empty, unable to afford their essential costs and finding themselves in desperate situations. Our data shows that the cost of living payments do offer some respite to people, but this is short-lived. Historically high energy bills, unaffordable housing, and other spiralling costs are keeping people in crisis. The government has responded with temporary support, but we need more than quick fixes. Long-term commitments are needed to raise people’s incomes and standard of living.”

In November, a committee of MPs concluded that the cost of living payments, while welcome, had not been sufficient to address the scale of the problem and recommended increasing benefits instead.

Commenting on the final payment to be paid out from Tuesday, Mel Stride, the Work and Pensions Secretary, said, “The economy has turned a corner, and with inflation falling, we are providing millions of the most vulnerable households with another significant cash boost.”

The prime minister, Rishi Sunak, mentioned in a BBC interview that the burden on hard-pressed households is “starting to ease.” He highlighted that pressures from higher bills or mortgage rates were subsiding. He emphasized that bringing down inflation was a priority, which has now decreased significantly. He also mentioned the drop in global energy prices and the Bank of England‘s decision to increase interest rates as factors contributing to lower price rises.

David, a 77-year-old resident of Nottingham, shared his financial struggles, stating that he had to carefully budget for food and clothes, making do with the minimum. He expressed concern about managing in the long term.

The government has pointed to a 6.7% rise in benefits and an 8.5% rise in the state pension, as well as increased financial support for those on benefits who rent privately, which will come into effect in April. However, questions have been raised about the sufficiency of these measures in helping those facing financial difficulty due to high bills and prices.

This final payment of £299 is the last of three instalments that totalled £900 and will have been paid within a year. No further cost-of-living payments are currently scheduled, with pressure on Chancellor Jeremy Hunt to announce more support in next month’s Budget.

The government has provided considerable support for the most vulnerable in society, amounting to about £100bn according to the prime minister. However, charities such as Citizens Advice call for long-term commitments and actions to raise people’s incomes and standard of living.

Note: This article is a summary based on the original source and does not include any fabricated information.

Rachel Adams

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