July is expected to bring significant changes to your financial situation, with a projected decrease in the Ofgem price cap and the introduction of new regulations from major high street banks.
Additionally, thousands of individuals will be transitioning to Universal Credit, and with a key deadline for the ongoing Personal Independence Payment (PIP) consultation. Also in July are key dates for self-assessment and Tax Credits as well.
The monthly inflation rate will also be monitored, especially after the Consumer Price Index (CPI) achieved the Bank of England’s target of 2% last month. An in-depth analysis from the Mirror provides insight into how these changes may affect you financially.
July – More people being moved over to Universal Credit
In July, the transition to Universal Credit will intensify, with thousands moving from their existing legacy benefits as part of the “managed migration” process. GOV.UK indicates that those receiving Income-related Employment Support Allowance and Child Tax Credits can expect their “migration notice” letters starting June 2024.
Recipients will be given a three-month period to switch to Universal Credit. The Department for Work and Pensions (DWP) predicts that 55% of claimants will see financial gains from Universal Credit, while 900,000 may experience financial losses.
For the rest, the impact of the change will be neutral. If you are uncertain about how you will be affected, there is useful information available to help you determine your potential outcome.
By the end of March 2025, most people will have transitioned to Universal Credit, with the exception of those claiming income-related ESA and not receiving Tax Credits, who will be moved over by 2028. Universal Credit is set to replace six benefits:
July 1 – Ofgem energy price cap
On July 1, the Ofgem energy price cap is scheduled to decrease from £1,690 to £1,568 annually. This is applicable to dual fuel households with typical energy consumption, paying via direct debit.
The price cap impacts around 28 million people in England, Scotland, and Wales. Despite its name, it doesn’t set a fixed limit on energy bills.=
The cap limits the unit cost of gas and electricity and the daily standing charge. Consequently, your actual bill will vary based on your energy usage, which means it could exceed or be less than the cap level established by Ofgem.
July 1 – Lloyds Bank upping bank account fees
Starting July 1, Lloyds Bank will raise the monthly charges on certain packaged bank accounts. The Club Lloyds Silver account will increase from £10 to £11.50 per month. Included in this account are European and UK multi-trip family travel insurance valid up to age 65, AA Breakdown Family Cover with Roadside Assistance, and mobile phone insurance.
The Club Lloyds Platinum account’s monthly fee will go up from £21 to £22.50. It provides worldwide multi-trip family travel insurance up to age 80, along with AA Breakdown Family Cover featuring Roadside Assistance, National Recovery, and At Home services. The Club Lloyds account will keep its monthly fee at £3, which is waived when a minimum of £2,000 is deposited monthly.
July 17 – Inflation
On July 17, the Office for National Statistics will release the latest inflation data. Inflation tracks the changes in prices over time. The most recent update from the ONS indicates that inflation reached the Bank of England’s target of 2% in the twelve months up to May.
In October 2022, inflation peaked at 11.1%. All eyes are now on the Bank of England to see if it will finally decide to cut interest rates on August 1, after maintaining its base rate at 5.25% for the seventh consecutive time at its last meeting on June 20.
July 22 – Barclaycard slashes minimum repayments
Barclaycard will reduce its minimum repayments on this date meaning some customers could be in debt for a longer period and paying more in interest overall. Right now, customers pay the highest of 3.75% of their balance, 2.5% of their balance plus interest, or £5. Most Barclaycards, including Avios, Platinum and Rewards, will see a change from July 22. The highest repayment will drop to either 1% of your balance, 1% of your balance plus interest, or £5.
Making only the minimum repayments each month, MSE calculates that it would take nine years and eight months to pay off a £1,000 balance, accruing a total interest of £699. With reduced repayments, the time extends to 19 years and three months, and the interest soars to £1,655.
July 23 – PIP consultation closes
The closing date for the PIP consultation is set for July 23. A new consultation is underway concerning potential reforms to the Personal Independence Payments (PIP) disability benefit, which is claimed by around three million people in the UK. A notable proposal in the “Modernising Support Green Paper” includes the replacement of regular payments with vouchers or single grants.
The DWP has suggested making PIP assessments more closely linked to an individual’s condition. For some, the PIP assessment could be reformed and removed entirely if they are severely ill. The Government says this will make it “easier and quicker for people with severe or terminal conditions to get the vital support they need” with the consultation on these changes set to end on July 23.
July 30 – Lloyds £175 switch offer ends
Lloyds Bank’s £175 switch offer is scheduled to conclude on July 30. This offer, providing a £175 payout, is available to customers who switch to a Club Lloyds account from May 18 until July 30, provided they transfer three direct debits. As well as this, Club Lloyds patrons can also handpick from a medley of other benefits, such as a Disney+ subscription, Vue or Odeon cinema tickets, a magazine subscription, or a Coffee Club and Gourmet Society membership.
Additionally, customers can benefit from an associated regular saver that offers a fixed interest rate of 6.25% on up to £400 per month. However, it’s important to note that a £3 monthly fee is associated with the Club Lloyds account unless a minimum of £2,000 is deposited monthly. Customers who have received switching incentives from Lloyds, Bank of Scotland, or Halifax since April 2020 are ineligible for the £175 switching offer.
July 31 – Payment on account deadline
Millions of self-assessment taxpayers are required to make a “payment on account” by this date. Typically, this applies to self-employed individuals or those with untaxed income. This advance payment is one of two that must be made annually, with the first due by midnight on January 31 and the second by midnight on July 31.
Failure to pay on time can result in penalties and interest accruing on the unpaid tax, currently at a rate of 7.75%, which is 2.5 percentage points above the Bank of England base rate. Moreover, if there is still tax due after this payment, an additional “balancing payment” may be necessary by January 31, 2025.
July 31 – Tax Credits renewal deadline
The renewal deadline for Tax Credits is July 31. Recipients of Tax Credits must renew their claims by this date. HMRC has finished sending out the Tax Credit renewal packs. If you have not yet received your pack, you should request one via phone. It is crucial for recipients to renew their Tax Credits each year to prevent the discontinuation of their benefits.
Renewals can be done online via your GOV.UK account, through the HMRC app, by calling the HMRC Tax Credit helpline at 0345 300 3900, or by posting back the renewal pack sent by HMRC.
