First cost-of-living payments hit Scots banks
The payment will automatically transfer to eligible claimants bank accounts
More than 600,000 households in Scotland will receive their first cost-of-living payment today.
The Department for Work and Pensions (DWP) will pay the first £301 instalment between April 25 and May 17 2023. Those on means-tested benefits such as Universal Credit or Income Support will receive £900 in total.
The Office for National Statistics (ONS) found the price for consumer goods and services rose at record levels. Yet, wages were not keeping up with the rate of inflation.
Anna Stevenson, from the financial charity, Turn 2 Us, said: “People who are on the lowest incomes have a higher rate of inflation than those on higher incomes. This is because price increases are on things that make up a much bigger proportion of the budgets of people on lower incomes.
“For example, a multi-millionaire spends a small proportion of their income on food. Even if they eat truffles for breakfast every morning, they will still be spending a fairly small proportion of their income compared to someone on a lower income.”
However, whilst the payment has been well-received, financial advisors are concerned about how the government will distribute it.
Stevenson said: “We did research at the time of the last payment that found the majority of our users ended up using a lump sum payment to pay off their debt. This means that people’s everyday financial sustainability didn’t improve.”
Those entitled to the payment will automatically get it if they also receive the following benefits: Universal Credit, income-based Jobseekers Allowance, income-based Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit or Pension Credit.
Charities hope the payment will help make a difference to those in financial poverty. However, campaigner and coordinator of End Fuel Poverty Coalition, Simon Francis, says the financial crisis is far from over.
He said: “Additional support is vital for households across the country right now as energy bills simply won’t come down till at least 2025. So, the payments that the UK Government are issuing is not enough.
“Around 1.7m households in severe fuel poverty are paying more than 20% of their household disposable income on energy costs, and they won’t be getting any support.”
Those who have not received the first payment may be entitled to the next one. Stevenson encourages anyone in financial distress to see if they are eligible for benefits as they could get the second cost-of-living payment.
More information can be found on Turn 2 US’s website: https://www.turn2us.org.uk/Your-Situation/Cost-of-Living.
