Furlough scheme, VAT holiday Universal Credit uplift and stamp duty holiday all come to an end
October looks set to be a decisive month for the finances of Brits as household costs rise while the Government is set to cut its support for households.
The furlough scheme, the VAT holiday, the Universal Credit uplift and the stamp duty holiday all end on 30 September.
While an energy price cap comes in on 1 October, pushing costs up by £140.
Additionally, food costs are rising, with ongoing supply chain issues driving them higher.
The furlough scheme ending is expected to lead to a rise in people being made redundant.
“The latest figures show that 1.6m people are still in furlough and even the bosses at the Bank of England are expecting a spike in unemployment as the scheme is wrapped up,” says Laura Suter, head of personal finance at AJ Bell.
The energy price cap is going to increase bills for the average customer by £140 from 1 October, but many will see rises far higher than this.
“Usually you’d be far better off getting off your provider’s standard variable tariff and locking in a fixed-rate deal, but the energy market is so barmy at the moment that no one is offering a fixed deal for a cheaper price than the energy cap,” says Suter.
“This means everyone needs to face up to rising energy bills, just as we head into the colder months. If your deal has ended you need to weigh up whether you want to secure a fixed-rate deal now, at a higher cost than your current price, with the expectation that you’ll be protected from rising energy prices. Or you can stick with the energy price cap rate and gamble that recent gas price rises end soon.”
Anyone who has been to the supermarket recently may have noticed that their weekly bill has been rising.
“A combination of shipping issues, driver shortages, supply chain issues and a leap in demand have all lead to a spike in prices – in July we saw the largest monthly rise in food costs,” says Suter.
“While you can’t directly combat rising prices, you can reduce your food bill. There are lots of offers out there for using online grocery delivery services for the first time, which can get decent discounts on a shop. Or you can go back to the old-fashioned methods of sticking to your list, meal planning and budgeting.”
