As if UK families didn’t have enough to handle already, it seems like some might have even more struggles on the horizon. As inflation soars, households across the nation might need help with their energy bills.
This does not constitute advice and advice should be sought in all instances before acting on it.
Unfortunately, economic growth is coming slower than expected as the nation is still recovering from the pandemic. But despite the International Monetary Fund’s (IMF) forecast of growth dropping from 5% to 4.7%, it’s still set to be the fastest of the G7 industrialised nations.
Increased food and energy prices were responsible for inflation hitting 5.4% in December, creating problems with already struggling families. There’s no other way around it – vulnerable households might need assistance as they face higher energy bills and a cost of living crisis.
As new variants of the coronavirus pop up and energy prices surge, the IMF has been forced to downgrade its forecasts for two major global economies – the US and China – putting the global economy behind where it was expected.
Because US President, Joe Biden’s Build Back Better fiscal policy is stalled in Congress and most likely won’t be enacted in its current form, the IMF removed potential effects from their calculations, which led to the growth prediction downgrade. Whereas in China, disruption in the housing sector has led to a broader slowdown – a delay with private construction due to increased COVID restrictions.
Omicron has made many countries reimpose strict restrictions, and rising energy prices and supply disruptions have all contributed to higher and broader inflation than experts originally predicted.
Inflation is expected to increase to the end of the year
And it seems like that won’t change any time soon as the IMF predicts that the higher levels of inflation will most likely persist through the rest of the year, especially if supply chain disruptions, energy price volatility, and local wage pressures continue as they are.
Even if your family might not be at risk of not being able to pay increased energy bills, the economy’s struggles could potentially reach you. If you’re concerned about how the broader state of the economy will affect your finances, get in touch with us today.
The good news
The government has announced the Energy Bills Rebate, a support package worth £9.1 billion in 2022-23 which is aimed at helping households to pay for the cost of rising energy bills:
- A £200 discount on energy bills in autumn 2022 for domestic electricity customers in Great Britain, automatically repayable over 5 years.
- A £150 non-repayable rebate for households in England in council tax bands A to D.
- A Discretionary Fund of £144 million for those in need but not eligible for the Council Tax Rebate.
We could see other support announced in The Chancellor’s Spring Statement.
Planning your family finances
If you need to review your finances to manage the increase in living costs, speak to Dental & Medical Financial Services.