Cost of living: Three key dates that will affect the cash in your pocket

  • Oops!
    Something went wrong.
    Please try again later.
·Political Correspondent, Yahoo News UK
·4-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
File photo dated 04/10/21 of Chancellor of the Exchequer Rishi Sunak who has issued a fresh signal of his determination to cut taxes ahead of the next general election amid concern among Tory MPs at the rising burden on the taxpayer. Mr Sunak has ordered Treasury officials to review options for reducing the tax burden which is set to rise to its highest level for 70 years. The Times reported that the measures could include a 2p cut in the basic rate of income tax and slashing the rate of VAT. Issue date: Saturday December 4, 2021.
There are several key dates that will provide key information on the cost-of-living crisis. (PA Images)

The growing cost-of-living crisis is leaving millions of Brits feeling the pinch, with April expected to be a crunch point as energy bills soar and tax rises start to bite.

Boris Johnson and Rishi Sunak are facing growing pressure to step in and offer new support, with experts warning that rising prices could prove "catastrophic" for some families.

The director of the Institute for Fiscal Studies, Paul Johnson, has said that 2022 could be worse than the financial crisis for households across the UK, and the Resolution Foundation think tank has called 2022 "the year of the squeeze".

Yahoo News UK looks at the key dates to look out for in the coming months which could have a significant impact on the cash in your pocket.

Energy price cap increase: 3 February (kicks in 1 April)

PICTURE POSED BY MODEL File photo dated 08/01/22 of a person holding an energy bill. Consumer confidence fell significantly in January as Britons braced themselves for surging inflation, rising fuel bills and the prospect of interest rate rises. Issue date: Friday January 21, 2022.
Energy bills are set to double in April. (PA Images)

Ofgem has announced a 54% energy price cap increase amid soaring oil and gas prices. That means UK household energy bills will rise £693 to £1,971 on 1 April.

Those on default tariffs paying by direct debit will see an increase of £693 from £1,277 to £1,971 per year, on average. Households who use prepay metres will see an increase of £708 from £1,309 to £2,017.

The cap sets a limit on how much suppliers can charge their customers for a unit of gas and electricity, and is reviewed twice a year by the regulator.

The change impacts around 22 million households whose bills are linked to the price cap.

Following Ofgem’s price cap rise announcement, Chancellor Rishi Sunak said every British household will receive an upfront £200 discount on their energy bill in October and four in five households will be covered by a further £3.5 billion of relief provided by £150 council tax rebates for bands A to D.

The £200 payment comes with a sting in the tail, as households will have to reply the fill amount to the tune of £40 a year over the next five years.

However, the plans have been described as “woefully inadequate” by the fuel poverty charity National Energy Action.

Caroline Abrahams, charity director at Age UK, said: “On behalf of older people on low and modest incomes we are bitterly disappointed by what we have heard today.

Spring statement: 23 March

File photo dated 27/10/21 of chancellor of the Exchequer Rishi Sunak holding his ministerial 'Red Box' before delivering his Budget to the House of Commons, as politicians on an influential committee have accused the Government of leaking market-sensitive information in the run-up to the last Budget.
Chancellor Rishi Sunak could announce more economic support for struggling households in the Spring Statement in March. (PA Images)

Often referred to as the ‘mini-budget’, the chancellor's Spring Statement will outline the direction of the government's economic plans, as well as the state of the economy.

The statement is held after the publication of economic forecasts, and it is highly likely the chancellor will talk about inflation, soaring energy bills, and the broader cost-of-living crisis.

Read more: Households will be 'devastated' overnight by soaring energy bills

At the 2021 address, Sunak announced new measures to tackle the economic impact caused by the pandemic, including the extension of the furlough scheme and the Self-Employment Income Support scheme.

National Insurance hike: 6 April

Prime Minister Boris Johnson speaks during Prime Minister's Questions in the House of Commons, London. Picture date: Wednesday February 2, 2022.
Boris Johnson defended planned increases to National Insurance contributions on Wednesday. (PA Images)

Controversial hikes to National Insurance contributions are set to kick in April.

The tax on earnings will jump by 1.25 percentage points, equating to around a 10% increase to the average amount paid.

The income from the tax hike has been ring-fenced to pay for health and social care.

The amount of National Insurance paid depends on earnings.

People earning between £9,568 and £50,270 a year currently pay 12%, which will rise to 13.25%.

The rise has been flagged by a number of experts as risking deepening the cost-of-living crisis, particularly given the timing coinciding with the spike in energy bills.

A growing number of Conservative MPs have criticised the rise, with senior Tory David Davis saying it is unnecessary because new figures revealed the government borrowed £13bn less this year than forecast.

Read more: Russian invasion of Ukraine 'could spark record-breaking gas and petrol prices in UK'

At prime minister's questions on Wednesday, Labour leader Keir Starmer criticised the hikes, saying the government was causing the "highest tax burden for 70 years during the middle of an inflation crisis".

However, the prime minister doubled down and defended the policy, stating it was part of "dealing with the consequences of the biggest pandemic this country has seen with an unprecedented economic crisis".

Watch: Cost of living: One in five cutting back on gas and electricity use amid inflation squeeze

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting