Published On: Fri, Jul 28th, 2023

8 key money changes for August – from alcohol rates to benefits changes | Personal Finance | Finance

As a new month nears, there are key financial changes Brits need to be aware of. From interest rate announcements to Costa Coffee club changes and updates on inflation, here’s what you need to know about the upcoming events.

August 1 – Alcohol Rates

Alcohol duty rates will rise by 10.1 percent from August 1, resulting in higher prices for some alcoholic beverages. Additionally, a new system will be introduced that taxes drinks based on their strength.

The Wine & Spirits Trade Association (WSTA) say the price of a bottle of wine with an alcohol by volume (ABV) will increase by 44p, while a bottle of port will rise by £1.30.

A smaller number of drinks will go down in price, including 14p off a five percent pre-mixed can of G&T and 7p off sparkling wine at 12 percent.

While this means an increase in the price of certain drinks, such as wine and port, a few others will see a decrease in price. Pubs will also benefit from reduced alcohol duty rates for beer, cider, wine, spirits, and other fermented products purchased on-site.

August 1 – Costa Coffee Loyalty Scheme

Costa Coffee is making changes to its loyalty scheme on August 1.

From this date, customers will need to collect 10 “beans” instead of eight to claim a free drink. This means purchasing two additional drinks or one extra drink when using a reusable cup.

August 3 – Interest Rates

The Bank of England will announce whether interest rates will be raised on August 3. This decision will impact the rates charged by banks and lenders, which in turn affects the rates you are charged as a borrower.

Higher interest rates mean increased costs for variable rate mortgages but potentially higher returns on savings.

August 16 – Inflation

The Office for National Statistics (ONS) will release the inflation rate for the 12 months to July on August 16. The Consumer Price Index (CPI) inflation figure indicates the rate at which prices of goods and services have increased over time. High inflation means prices have risen more sharply, reducing the purchasing power of your money.

August 25 – Ofgem Price Cap

Ofgem will update its price cap on August 25, which will impact energy prices from October 1 to December 31. While the current price cap for a typical household with average energy use paying by direct debit is £2,074 per year, analysts predict a potential decrease to £1,860 in October.

However, it’s important to remember that the price cap represents what someone with typical usage is likely to pay over a year, and individual costs can vary based on energy consumption and payment method.

August 28 – Bank Holiday

England and Wales will observe a bank holiday on August 28. If you receive benefit payments, you may receive them on the previous working day, August 25.

It’s essential to budget accordingly, as you’ll have a longer wait until your next benefit payment.

August (no set date) – Universal Credit Migration

Throughout August, more households claiming legacy benefits will be moved to Universal Credit. Universal Credit replaces several benefits, and the Department for Work and Pensions (DWP) aims to complete the migration by December 2024. If you receive income-related ESA and do not receive Tax Credits, your transfer will occur by 2028. You will receive a migration notice in the post with a three-month deadline to start claiming Universal Credit.

The DWP will make contact with people in the following areas next month:

West Scotland
South London
West Yorkshire

August (no set date) – PIP Changes

From August, the DWP is introducing a new “light-touch” review for Personal Independence Payment (PIP) claimants. Those with 10-year awards will only need to fill out a shorter six-page form instead of the usual 16 page one, and in most cases, an assessment with a healthcare professional won’t be required. This change also applies to most individuals above state pension age who are undergoing review.

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