8 money changes coming in August including Ofgem price cap and benefits shake-up
There are plenty of key dates and financial changes that could affect your wallet in August.
The latest interest rates announcement from the Bank of England is due next week, and there will be another inflation update later in the month.
New events to mark in your diary include a change to alcohol duty rates, which will affect how much you pay for booze, and a massive shake-up of the Costa Coffee loyalty scheme.
Ofgem will also announce its latest price cap update this month, which will impact energy prices from October as we move into the winter months. Here is everything you need to know.
August 1 - Alcohol rates
Alcohol duty rates will rise by 10.1% from August 1 - which means the price of some booze in stores is to become more expensive. At the same time, a new system will also be introduced that taxes alcoholic drinks according to strength.
Greggs, Costa & Pret coffees have 'huge differences in caffeine', says report
According to the Wine & Spirits Trade Association (WSTA) the price of a bottle of wine with an alcohol by volume (ABV) will increase by 44p, while a bottle of port will rise by £1.30.
A smaller number of drinks will go down in price, including 14p off a 5% pre-mixed can of G&T and 7p off sparkling wine at 12%.
Drinks purchased in pubs are also set to see a price cut from August under the "Brexit pubs Guarantee". The "Draught Relief" will cut alcohol duty by 9.2% for beer and cider and 23% for wines, spirits and other fermented products purchased in pubs.
August 1 - Costa Coffee loyalty scheme
Costa Coffee is changing its loyalty scheme on August 1 - and it's increasing the number of "beans" you need to claim a free drink.
At the moment, customers who use the Costa Coffee app get one "bean" for every drink they purchase, or two “beans” when you use a reusable cup.
Once you have collected eight "beans" you then get a free drink. But from August 1, the amount of “beans” you need to collect will rise to ten. This means you will need to buy two extra drinks to collect your freebie, or one extra with a reusable cup.
August 3 - Interest rates
The Bank of England will announce whether interest rates will be raised again on August 3. The central bank increased the base rate on June 22 to 5%.
The base rate is what the Bank of England charges other banks and lenders - this in turn then influences the rates you are charged as a customer when you borrow money.
If interest rates are higher, you'll pay more to borrow on products like variable rate mortgages - but the flip side is, savings rates should go up. At the moment, analysts are expecting the Bank of England to raise the base rate to 5.25% or 5.5%.
August 16 - Inflation
The Office for National Statistics (ONS) will release the inflation rate for the 12 months to July on August 16. Consumer Price Index (CPI) inflation is a figure used to explain how much the prices of goods and services have increased over time.
Costa Coffee cappuccino has four times the amount of caffeine as a Red Bull
When inflation is high, it means prices have risen more sharply and you’re getting less for your money than before. CPI inflation fell by more than expected to 7.9% in the 12 months to June after spending two months stuck at 8.7%.
Analysts had expected inflation to fall to 8.2%. At its worst point, inflation hit a 41-year high of 11.1% in October last year.
August 25 - Ofgem price cap
Ofgem will update its price cap on August 25 - this will affect energy prices from October 1 to December 31. At the moment, a typical household with average energy use paying by direct debit pays £2,074 a year under the Ofgem price cap.
Analysts at Cornwall Insight currently expect the price cap to fall to £1,860 in October - although this prediction is likely to change over the next few weeks.
But it's important to remember there isn’t a total cap on how much you can pay for energy - this headline figure is used illustrate what someone with typical usage is likely to pay over a year.
You can end up paying more or less, depending on how much energy you use - as well as how you pay your bill. If you’re a prepayment customer, the price cap is £2,046 a year and for those who pay on receipt of bill, the price cap is £2,211.
August 28 - Bank holiday
There is a bank holiday on Monday, August 28, for people living in England and Wales - and if you claim benefits, this could affect your payments.
If you are due a benefit payment on this date, it is likely you will receive your money the previous working day - so Friday, August 25.
Being paid early may seem like a good thing - but it does mean you’ll need to make your money last longer. This is because you’ll have a longer wait until your next benefit payment.
August (no set date) - Universal Credit migration
More households claiming older legacy benefits will be moved to Universal Credit throughout August. Universal Credit is replacing the following six benefits:
Working Tax Credit
Child Tax Credit
Income-based Jobseeker’s Allowance (JSA)
Income Support
Income-related Employment and Support Allowance (ESA)
Housing Benefit
The Department for Work and Pensions (DWP) wants the majority of people moved over by December 2024 - however, if you claim income-related ESA and do not get Tax Credits, you will be transferred across by 2028.
When it is your turn to switch benefits, you will receive a "migration notice" in the post and given a three-month deadline to start claiming Universal Credit.
But not everyone will be better off - we've got a guide here on how to check if you'll get more money on Universal Credit. The DWP will make contact with people in the following areas next month:
August (no set date) - PIP changes
The DWP is launching a new "light-touch" review for people claiming Personal Independence Payment (PIP) from August.
When you're awarded PIP, your claim usually lasts between nine months and ten years before you have to renew your benefit.
Those with shorter-term PIP awards typically have to fill out a 16-page form - but thousands of those with ten-year awards will soon only have to fill out a shorter six page form. In most cases, an assessment with a healthcare professional shouldn’t be needed either.
As well as people with ten-year claims, most people above state pension age and claiming review will be moved to "light touch" review forms as well.
PIP is a benefit designed to help working age adults living with an illness, disability or mental health condition. If you’re successful in your PIP claim, you could get between £26.90 and £172.75 per week.
Read more similar news:
Comments:
comments powered by Disqus
