The UK Government has announced a new package for additional support worth £15bn to provide support to families struggling due to the cost of living crisis.
The package was announced by Chancellor Rishi Sunak on the 26th of May in an attempt to help millions of vulnerable households across the country.
The rapid rise in the prices of fuel, food and other goods has led to a massive increase in inflation, which is now at a 40-year high.
The support package follows the cost of living crisis and the rising inflation rate and is meant to provide more targeted support to the pensioners, the disabled and struggling households.
What’s more, a brand new update regarding the energy bills rebate, that can greatly benefit vulnerable households was also announced by Mr Sunak.
What the Government’s Announcement Means For You
- Every household to receive a one off £400 energy bill discount in October
- 8 million households on means-tested benefits to get £650 in direct payments over 2 payments. First in July, second in Autumn
- Separate £300 payment to pensioner households
- Separate £150 payment to those receiving disability benefits
The Energy Bills Rebate
The package included a government turnaround by Chancellor Rishi Sunak regarding the energy bills rebate of £200 that was announced earlier this year.
Originally, households were supposed to receive a £200 discount to help with rising energy bills, with the government covering the costs.
This discount was to be paid back by the households by paying an extra £40 on energy bills per year for a period of five years from 2023.
However, according to the announcement on 26th May, the previously £200 worth of energy bills rebate is now doubled to £400 and will be a grant.
This means the requirement to pay it back over the next five years is also scrapped in order to further tackle the rapidly increasing energy prices.
This extremely beneficial rebate was meant to provide relaxation from the £800 energy bill rise that is set to affect households in October, as reported by Ofgem.
The £15 Billion Package
“We have a collective responsibility to help those who are paying the highest price for the high inflation we face. That is why I'm targeting this significant support to millions of the most vulnerable people in our society” says Rishi Sunak.
The Chancellor of the Exchequer, Rishi Sunak, announced a £15 billion package of additional support to help struggling households.
The package involves a number of benefits to the citizens of the UK that can greatly support households and offer some relief from rising inflation.
As per new updates, the most vulnerable households will also get a one-off payment of £650 to help with the cost of living. This will be paid in two lump-sum payments directly into their bank accounts.
Moreover, separate one-off payments worth £300 and £150 were announced for pensioner households and individuals receiving disability benefits, respectively.
In response to the package, Paul Johnson, Director of the Institute for Fiscal Studies said, “ Rishi Sunak has announced a genuinely big package of support for households.”
He further showed his concern for poor families with children as he claimed that the “flat rate nature of the payments was slightly less generous to families with children than to those without.’
He went on to say, “Even so, put these benefit increases alongside the tax rises just implemented, and Mr Sunak is engaging in some serious redistribution from rich to poor - albeit against a backdrop of rising inequality.”
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