What will happen to energy bills and mortgages? Upcoming dates to know

By Shanaz Musafer
Business reporter, BBC News

Prices are rising and millions of people are starting to feel the effects.

Here are some important dates and events in the coming weeks that will almost certainly mean more belt-tightening.

Cost of living payments

Despite rising household bills and store prices, help is on the way for some households.

People receiving disability benefits will receive a one-off living cost payment of £150 from 20 September.

More than eight million low-income households on means-tested benefits will also receive £324 – the second part of the cost of living payment – this autumn. The first installment of 326 pounds was made in July.

Those who have the tax relief have had to wait longer, as the first payment for most of them was made between September 2 and 7, and the second will be made in the winter.

September 22 – The next decision on interest rates

The Bank of England postponed its next meeting on interest rates from September 15, following the death of Queen Elizabeth II.

The central bank raised rates to 1.75% in August and is expected to rise again, possibly to 2.5%.

To give you an idea of ​​what this could mean, a quarter of a point increase on a standard £250,000 variable rate mortgage, paid back over 25 years, could mean paying £30 more a month, says Andrew Montlake, of mortgage brokers Coreco.

And people with fixed rate mortgages are also in trouble. “We’re starting to see ‘payment shock,'” Montlake says, referring to the nasty surprise people face when their fixed term ends and they face higher rates.

He added that it will take some time to feel the full impact of the increase in these rates. “In the coming months and early next year, when you’re faced with rising energy bills along with rising mortgage payments, that’s when people can start to struggle.”

Of course, any rise in interest rates would be good news for savers, although banks don’t always pass on the full rate hike to their savings accounts. For example, after the recent half a percentage point rise, Santander only applied that rise to its Help to Buy ISA – rates on its other savings accounts only rose by a quarter of a percentage point.

September 23 – Small budget

The new prime minister has vowed to cut taxes to boost the economy and help people facing rising living costs.

October 1 – Energy price guarantee comes into effect

As electricity and gas prices soared, Ms Truss limited the impact on homes and businesses.

The government’s energy price guarantee replaces the energy price cap and will limit how much suppliers can charge per unit of energy.

This means a typical household’s annual bill will not rise by more than £2,500 from October. Without this intervention, that annual bill would have been £3,549 a year. However, this is still almost double what people were paying last winter.

The scheme will run for two years and applies to all households in England, Scotland and Wales. In Northern Ireland, the “same level of support” will be available.

October 19 – Inflation figures related to state pensions and other benefits

This is a key date for pensioners. The Office for National Statistics will reveal the inflation figure for September and it is this figure that will be used to determine the increase in the state pension that will come into effect in April 2023.

After a year of suspension due to the pressures caused by the pandemic on public finances, the so-called “triple lock” will be restored. This ensures that the state pension will always increase each year by inflation, average wage increases or 2.5%, whichever is higher.

Inflation is currently around 10% and is expected to rise even further, which would mean that pensions will see double-digit increases.

Other benefits are also linked to September’s inflation rate, including universal credit, disability support and jobseeker’s allowance.

Autumn budget

In late October or early November there would usually be a budget, where tax increases or cuts, public spending plans and other measures affecting people’s finances would be announced.

But September’s small budget could replace this.

November 3 – Next interest rate decision and Monetary Policy Report

Another rise in interest rates could be on the cards, so there will be interest in what the Bank of England has to say about inflation and economic growth. After publishing its latest Monetary Policy Report in August, the central bank announced a prolonged recession.

Nov/Dec – £300 pensioner living cost payment

Households receiving the Winter Fuel Payment – which is worth £200-£300 and is paid to almost all households with at least one person of pension age – will receive an extra £300 in November or December. This should cover almost all pensioners in the UK.

December – Christmas spending

Christmas Eve is usually the biggest shopping day of the year, apart from Black Friday, which is the last Friday in November. However, given cost pressures, people will start saving for gifts much earlier than usual, Barclaycard has predicted.

December 15 – Next decision on interest rates

However, another rate increase may come at the end of the year. The Bank of England will assess the impact of its previous actions, but most forecasters expect interest rates to rise to 3% next year, with some saying they could rise to 4%.

Mid-December – Train fare increase announced

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