Spring budget brings good news for tenants on energy, childcare & pension front | Tenant news

This week’s spring budget offers good news for Habinteg tenants in the form of an extension to the energy support scheme, free childcare for children over nine months, and an increase in pension allowance.

Energy support

The Chancellor, Jeremy Hunt, revealed that the Energy Price Guarantee scheme will remain in place for an additional three months.

This means the energy cap will stay at the current level of £2,500 until the end of June rather than rise to £3,000 from April, saving a typical household £160. No doubt thanks to a strong campaign by MoneySavingExpert, Martin Lewis backed by 110 charities to stop this increase going ahead.

As of 1 April 2023, the new average unit price for dual fuel customers on standard variable tariffs as per Ofgem’s price cap and paying by direct debit will be to 33.2p/kWh (pence per kilowatt hour).

It’s important to note that all unit prices are varied dependant on your region, and what meter you’re on.

Lower wholesale gas prices are expected to lead to lower household energy bills from July.

What will you pay?

One of the quickest ways to find out what you’ll be paying roughly is by using MoneySavingExpert’s EPG estimate calculator. You need to know your annual energy usage in kWh ((pence per kilowatt hour), choose your method of payment and your region.

To view the full list of the maximum unit rates that suppliers can charge customers according to the Ofgem price caps, please visit the government website. Alternatively, speak to your supplier.

If you’re still struggling to pay energy bills, speak to your energy supplier directly or contact Turn2Us or your local Citizens Advice team.

Boost to childcare

For parents, this budget brings much welcome help in the form of 30 hours of free childcare for children age nine months and up for where adults are working 16 hours or more.

This will be introduced in phases:

• April 2024: 15 hours free childcare for working parents of 2-year-olds.
• September 2024: 30 hours of free childcare for those 9 months to 2 years.
• September 2025: 30 hours free childcare for those under 3 years.

The Universal Credit childcare allowance maximum amounts will also increase to £951 for one child and £1,630 for two children.

Mr Hunt has also increased funding to nurseries from £204m from September 2023 to £288m in 2024.

Pension allowance increase

For people who are retired or close to retirement, the Chancellor has raised the pension annual allowance  - that’s the total amount you (& your employer) can save into your pension plan each year before you have to pay an additional tax charge - . will rise from £40,000 to a maximum of £60,000 on 6 April 2023.

If you access any taxable money from your pension - through a drawdown or from cashing in your pension savings - your allowance may be reduced. The amount you can save into your plan will usually reduce from £40,000 to £4,000. This is known as the money purchase annual allowance (MPAA).

Today, Mr Hunt announced that the MPPA will increase to £10,000 from April. This means anyone who dipped into their pension pot to help top up their income during the pandemic, can now top up their pension pot if they wish.

For people who want to keep working and paying into pension their pension a little longer, in order to have a more comfortable retirement, the changes will likely be welcome news.

Returning to work

If you’re over 50, and retired or currently not working, the government is hoping to encourage you back into work through a new apprenticeships programme of “Returnerships”.

For disabled people or those with a long-term illness Mr Hunt will abolish the Work Capability Assessment. Disability and long-term illness benefits claimants will no longer lose their entitlement to benefits if they return to work.

And, the National Living Wage will also increase to £10.42 an hour.

Meanwhile the good news for everyone is that the Independent Office for Budget Responsibility suggests that inflation will fall from 10.7% in the final quarter of this financial year to 2.9% by the end of 2023, which means prices will rise at a slower rate.

If you’re looking for help or advice on energy bills, income, household bills or emergency funds, please visit our cost of living support hub at www.habinteg.org.uk/cost-of-living-support