Cost of living: 10 money changes to be aware of in May including payment dates, deadlines & energy bills help
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The cost of living crisis means we’re all paying more attention to our finances than ever. It’s never been more important to keep an eye on what you’re spending as the prices of energy, food and more remain high, with many forced to scale back.
To help you manage your money, here is a round-up of 10 key changes which could affect your wallet in May. The list includes changes to benefit payment dates, along with the latest on the Energy Price Guarantee and the monthly Bank of England interest rate and inflation announcements.
Here are 10 money changes to be aware of in May 2023.
Bank holidays - benefit payments may be affected
There are three bank holidays this month:
- Monday, May 1: The early May bank holiday
- Monday, May 8 to celebrate the coronation of King Charles III
- Spring bank holiday on Monday, May 29
Bank holidays could affect your payments if you are a benefit claimant. It means that if you’re due a benefit payment on one of these dates, you’ll likely be paid the previous Friday.
This means your payment will fall on May 5 or May 26 for the upcoming bank holidays. While getting paid early may seem like a good thing, it means you’ll need to make your money stretch further as you’ll have a longer wait until your next payment.
Self-assessment tax return fines
The self-assessment tax deadline for filing online was January 31, 2023. If you missed this, you will have been charged a £100 penalty fine.
And if you still haven’t paid by May 1, you’ll start to accrue further penalties of £10 a day, capped at 90 days, to a maximum of £900. When it gets to six months, you’ll be fined 5 per cent of the tax you owe or £300 - whichever is greater.
This is repeated again at 12 months and interest is also added on top of penalties. With this in mind, it’s worth contacting the HMRC to check you are up to date with your tax return if you’re unsure.
Cost of living payments - for Tax Credit households
One million families claiming Tax Credits will receive a £301 cost of living payment between May 2 and May 9. This is the first of three payments totalling up to £900 and will be issued by HMRC, rather than the DWP.
To qualify for the cash boost, you need to have received Tax Credits between January 26 and February 25 2023, or later be found to have been entitled to a payment for this period.
Meanwhile, more than eight million families claiming benefits from the Department for Work and Pension (DWP) started to receive £301 from April 25 and should be paid by May 17. This includes those claiming Universal Credit, Pension Credit and Income-based Jobseekers Allowance.
Tesco online shopping service change - minimum spend increase
Tesco is increasing the minimum spend and charge for shoppers ordering their groceries from its website from Tuesday, May 2. The supermarket giant currently charges £4 if the value of your home delivery shop is below £40.
However, this is rising to £5 and you’ll need to spend a minimum of £50 to qualify for home delivery. The minimum order fee of £25 for click and collect shoppers will remain the same.
Interest rates - you could pay more on products like mortgages
The Bank of England is set to announce whether interest rates will be raised again on May 11. The central bank increased the base rate to 4.25 per cent on March 23.
The base rate is what the Bank of England charges other banks and lenders, which in turn influences the rates customers are charged when they borrow money. If interest rates are higher, you’ll pay more to borrow on products like mortgages.
On the positive side, an increase means that saving rates should go up.
Pension Credit backdate
If you qualify for Pension Credit but you’ve not yet started claiming it, you can backdate your claim by three months. If you backdate your claim by May 19, you may also be entitled to receive the £301 cost of living payment.
You will need to have been eligible between January 26 and February 25, as this is the qualifying window.
Tax Credit renewal packs - renew or you could lose your benefit
Between May 2 and June 15, the HMRC will send out 1.5million renewal packs to Tax Credit claimants. Claimants must renew their claim every year or risk their benefit being stopped.
You can do it online through your Gov.uk account or you can use the HMRC app. Claimants can also call the HMRC Tax Credit helpline on 0345 300 3900 or post back the renewal pack you are sent by HMRC. You have until July 31 to renew your Tax Credit claim.
The inflation rate for the 12 months to April will be released by The Office for National Statistics (ONS) on May 24. Inflation shows how much the prices of goods and services have increased over time.
Inflation currently stands at 10.1 per cent - down from its previous 41-year high of 11.1 per cent.
Ofgem price cap announcement
Ofgem will announce its energy price cap for July to September on May 26. Households are currently covered by the Energy Price Guarantee, which has set the typical energy bill for most households at £2,500 a year and effectively replaced the Ofgem price cap.
Both the Energy Price Guarantee and Ofgem price caps put a limit on how much you can be charged for unit rates and standing charges. The Energy Price Guarantee is due to rise to £3,000 in July, but analysts suggest energy prices will fall and we’ll go back to the Ofgem price cap by this point.
Last chance to claim £200 energy help - May 31
Households using biomass, heating oil, LPG and other alternative fuels can get £200 to help with their energy bills. Most people who are eligible should have received the £200 Alternative Fuel Payment automatically.
If you didn’t, you need to apply by May 31 on the Gov.uk website.