Household Support Fund to Debt Relief: What does the spring Budget mean for cost of dwelling?

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Chancellor Jeremy Hunt offered his highly-anticipated spring Budget on Wednesday, delivering on his widely-expected 2 per cent minimize to nationwide insurance coverage.

Amongst Mr Hunt’s different coverage bulletins got here adjustments to little one advantages, a brand new levy on vaping merchandise, and a serious overhaul of the ‘non-dom’ tax standing.

The chancellor has known as his adjustments to nationwide insurance coverage contributions a “tax cut for working people,” nonetheless it has been identified that the tax burden for low-earners may very well nonetheless be larger than it was a couple of years in the past.

Responding to the chancellor’s assertion, Sir Keir Starmer stated that the authorities is asking folks to “pay more and more for less and less”.

“Food prices still 25 per cent higher than they were 2 years ago, rents up 10 per cent, an extra £240 a month for a typical family remortgaging this year, because they lost control of the economy,” he stated.

A number of of the chancellor’s adjustments may have a optimistic influence these on low-incomes, offering restricted assist for these most in want throughout the ongoing cost of dwelling disaster.

Below we have a look at what the 2024 Budget means for folks on Universal Credit, receiving different advantages, or low-incomes:

Household Support Fund prolonged

The Household Support Fund (HSF) is cash given to all native councils to assist weak households of their space. It was due to finish on 31 March, with no indication of an extension from the authorities.

That has been addressed by Mr Hunt in his spring Budget, giving native councils one other six months of HSF funding. Local authorities and poverty charities have been calling for this for months.

Many councils had already begun declining new purposes for assist earlier than the finish of March deadline, however this may give struggling households an additional monetary lifeline for half a yr longer.

Cllr Shaun Davies, Chair of the Local Government Association, stated: “We are pleased the Chancellor has extended the Household Support Fund (HSF), which has helped millions of households facing hardship.

“It is disappointing that we had to wait until the very last minute for an extension, and that it is only for a short period. Three-quarters of councils expect hardship to increase further in their area over the next 12 months.”

Each native council allocates its HSF funding in a different way, based mostly on the way it feels it can finest serve the space. To discover out what assist is offered to you, the End Furniture Poverty charity provides a useful help finder software.

Extension to budgeting advance loans pay again

The authorities at the moment provides a ‘budgeting advance loan’ for folks on UC going through an emergency lack of cash. Prior to the price range, the compensation interval for these loans was 12 months. It has now been doubled to 2 years.

These loans are interest-free, and mechanically deducted from Universal Credit funds. You can borrow an ‘advance’ of up to:

Money Saving Expert Martin Lewis welcomed the transfer, tweeting: “This is a welcome move. It lessens the burden on some the payback of lowest incomes.”

Debt Relief Order charges scrapped

Those battling debt in the UK are ready to apply for a Debt Relief Order (DRO) from the authorities. You will want to meet particular standards, together with owing lower than £30,000 and having lower than £75 a month spare earnings.

Prior to the price range, the software payment for a DRO was £90. This will probably be abolished from 6 April. You will nonetheless want to contact an accredited debt advisor, reminiscent of Citizens Advice, to apply.

Responding the the price range Dame Clare Moriarty, Chief Executive of Citizens Advice, stated: “Today the Chancellor supported people in the most dire situations.”

“These unaffordable fees have priced people out of getting the support they need as 9 in 10 people with a DRO struggled to pay the upfront cost.”

“But we’re expecting this year to be just as tough, if not worse, than the last 18 months for many.”

Are advantages going to rise?

The chancellor didn’t handle advantages in his spring Budget, so they continue to be set to rise from 1 April. This was introduced by Mr Hunt in his autumn assertion final yr, confirming they might rise in step with at 6.7 per cent in step with inflation.

However, the rise does not meet the inflation hikes of the prior yr, which reached a peak of 11.1 per cent in October 2022.

Responding to the price range, Paul Kissack, Chief Executive of the Joseph Rowntree Foundation stated: “This was a Budget for big earners and big owners.

“Cutting national insurance gives you an eye-catching headline but doesn’t fill the gap for the millions in our country experiencing deepening poverty.

“For the people struggling to afford the rent or the weekly shop, or having to visit a food bank, that widening gulf is all too real”.