Up next
What are the 4 types of AI?
AUGUST is bringing with it a raft of changes for your money – from Universal Credit to alcohol.
Tax on booze is set for its biggest shake-up since 1975, hitting the wallets of drinkers.
1
Meanwhile, more households on legacy-style benefits are being moved over to Universal Credit.
And those already on Universal Credit may get paid earlier than expected at the end of the month.
The changes are all important to know so you can plan ahead and avoid being caught off guard.
We explain what’s happening and when.
1. Alcohol duty hike – August 1
Drinkers face a tax hike from the start of the month when duty rates rise in line with inflation.
The price of some drinks will creep up by as much as £1.29 while the cost of a bottle of wine will climb by 44p.
Hated alcohol levies were originally due to be hiked on February 1, but Chancellor Jeremy Hunt delayed the move for another six months.
This means that alcohol duty rates will rise by 10.1% on August 1.
Most read in Money
A further change previously announced will see a simplification of the duty that could add a further 9% to some drinks from the same date.
This represents the biggest shake-up to duty rates since 1975.
2. Costa Coffee shakes up loyalty scheme – August 1
Costa Coffee is hiking the number of beans loyal customers need to collect to get a free drink in August.
The cafe giant currently gives punters a free drink after collecting eight beans – one after every drink.
But from August 1, Costa wants diners to collect ten beans before being awarded a free tipple.
It means customers at the chain’s 2,600 UK outlets will have to buy two extra coffees at a cost of up to £12 before receiving any reward.
3. Bank of England committee meeting – August 3
The Bank of England will decide whether or not to hike the base rate on August 3.
High street banks use this rate to work out the interest rates it offers to customers.
A hike would mean the cost of borrowing, including loans, credit cards and mortgage repayments will get even more expensive.
In June, the central bank unexpectedly increased its base rate by 0.5 percentage points to 5%, the sharpest increase since February.
This is the highest rate in just under 15 years since September 2008.
It is also the 13th time in a row that the BoE has raised rates since December 2021 when they were at historic lows.
4. UK inflation rate – August 16
The UK’s inflation rate for July will be revealed on August 16 by the Office for National Statistics (ONS).
Inflation is a measure of how the price of goods and services has changed over the past year.
In June, the inflation rate fell by more than expected to 7.9% – down from 8.7% – meaning prices are still rising but at a slower pace.
While the announcement in itself isn’t a change, the July rate is important as it’s typically used to set the increase in rail fares.
These will take place from the start of 2024.
Last year, the July rate came in at 12.3% – but the government capped the rail hike to 5.9% to help commuters.
5. Bank holiday affecting benefits – August 28
Millions of households on Universal Credit and benefits may get their payments earlier due to the Bank Holiday on August 28.
If you usually get paid on the 28th, you’ll see your cash land in your bank account a few days before – most likely Friday, August 25.
This affects the following benefits:
- Attendance Allowance
- Carer’s Allowance
- Employment Support Allowance (ESA)
- Jobseeker’s Allowance (JSA)
- Pension Credit
- Personal Independence Payment (PIP)
- State pension
- Universal Credit
- Working Tax Credit
- Child Tax Credit
- Child Benefit
- Guardian’s Allowance
Bear in mind that as your payment will be made earlier in August, make sure you budget for the following month.
Income Support, Jobseekers allowance and pension credit payments usually arrive every two weeks while the rest arrive every four weeks.
6. Universal Credit migration – throughout August
The government will move more households on so-called “legacy benefits” such as tax credits onto Universal Credit.
From August, the Department of Work and Pensions (DWP) will make contact with people in the following areas:
The government plans to move all claimants onto Universal Credit by the end of 2024.
The move, called Managed Migration, began in May last year and came after a successful pilot in Harrogate in July 2019.
Once you receive a letter, you have three months to move over, or you could lose your current benefits.
In most cases, individuals will be better off following a move from legacy benefits to Universal Credit.
But 300,000 could be worse off, and should not move until they absolutely have to as they could end up with less money.
7. Changes to PIP – throughout August
Three major changes to Personal Independence Payment (PIP) benefits are due to be rolled out over the summer.
From August the DWP is introducing a new “light-touch” PIP review.
That means the new simplified form will be used to assess a long-term claimant’s eligibility for the benefit.
Unlike the usual 16-page award review form that’s issued to those with shorter-term PIP awards, those with 10-year awards will only need to complete a shorter six-page form.
Another major change is the scrapping of face-to-face assessments for those with long-term awards.
Unless a person’s medical condition has changed a face-to-face assessment will not be required as of next month.
