Food and energy prices continue to rise, but there might be some silver linings.
It’s not looking great on the economic front. Recent news suggests that this year Britons are facing the biggest fall in spending power for seventy years. This is because as the worsening cost-of-living gets more expensive, it eats further into our wages, leaving us with less to spend.
Although inflation is predicted to reduce by more than a half, to 2.9% by the end of this year, that’s still well ahead of the rate at which wages are increasing, meaning the crisis won’t be over by the end of 2023, just slowed. None of this looks particularly hopeful. All we can say is that things are set to get worse less quickly from now, according to recent government research from the Office for Budget Responsibility.
But, the other news is that the budget has been published, and for some of us there are some positives to be found. Firstly, our Energy Price Cap isn’t going anywhere until July, and it will stay at £2,500. Childcare costs will also be discounted for many parents, starting in April 2024. Currently, working parents with three and four-year-olds are eligible for thirty hours of free childcare each week. But the new budget plans to widen eligibility to younger children. First, two-year olds will be entitled to fifteen hours a week, then to children as young as nine-months-old, and finally to all children from nine months to four-years-old receiving the full thirty hours weekly. In addition, families on Universal Credit, will be paid childcare funding upfront, rather than having to claim it back, and the maximum a family on Universal Credit will be able to claim for one child will rise to £951 from £646 each month.
Something else worth noting is that income tax brackets aren’t about to change until 2028. This means that any pay rise could propel you into a higher band. Even if it doesn’t, it will undoubtedly mean that a larger proportion of your income will be taxed over £12,570.
So it is important to know what we are eligible for, so we can increase our income as much as possible. In 2022, the government saved fifty-million pounds on energy vouchers that were forgotten to be cashed in, so it is important to be aware of all possible options to maximise income whilst the world becomes more expensive.
If you need help budgeting, please download out Wave Money Guide, which includes a budget template and other helpful money management advice. Also if you are looking to maximise your money then visit our MoneyHelper page which has lots of helpful articles and advice to make savings.
