Six financial changes coming in February – MoneyMagpie
We have reached the finish line – the seemingly longest month on record has finally ended. January is no more!
However, as we head into February, there are a few events and changes you may need to be aware of. These could impact your finances and the wider economy. It’s good to stay up to date to ensure you don’t face any nasty shocks during the coming weeks.
Here are six financial changes happening in February.
Energy price cap announcement
At the end of February, energy regulator Ofgem will announce the new energy price cap. This will be announced on February 27th, and will apply between April and June of this year. Although nothing is yet confirmed, Ofgem’s Chief Executive Jonathan Brearley has suggested the price cap may drop below £3,000.
If the energy cap does fall below this amount, customers would only save a small amount of money due to the current energy price guarantee set by the Government. Although the price cap will be below £3,000 annually for the average household, your energy bills will ultimately depend on your usage.
Water bill rises
Nothing has been confirmed as of yet, however in 2022, Water UK announced how much water bills could rise this month. Of course, the amount your bill will rise by (or reduce by, in some areas!), will depend on your geographical location, how much you currently pay and your usage.
Different locations across the UK are under different water companies, with each company responsible for setting bill prices in their area.
Passport renewal fees
From the beginning of February, passport renewal fees are going to increase – by a whopping 9%! The Home Office has said new fees will help the system meet its costs through those who use it.
From Thursday, 2nd February 2023, it will now cost £82.50 to renew an adult’s passport, up from £75.50. The cost of a new passport for a child will also increase by just under a fiver to £53.50.
Applying for a new passport via the Post Office will also increase in price. An adult will now be shelling out £93, an £8 increase from the previous £85. Children’s passport applications will also rise from £58.50 to £64.
In terms of overseas standard paper applications, the cost for adults will increase from £95.50 to £104.50. Applications for children will also increase, from £65.50 to £71.50.
Bank of England’s quarterly meeting
The Bank of England’s Monetary Policy Committee (MPC) meets every quarter to decide if interest rates should increase. The next meeting will take place in just two days’ time, on February 2nd.
If interest rates should increase again, the cost of borrowing will become more expensive. This includes loans, credit cards and mortgage repayments even more costly.
This could be good news, however, for those with savings. Savings rates will get a boost as banks continue to offer the highest interest rates seen in years.
Changes to Universal Credit
If you are in receipt of Universal Credit, an important change is being put into place. Around 120,000 people on UC will be impacted as a result of this, so make sure to take note!
The Administrative Earnings Threshold (AET) is increasing. This means people have to earn more to be exempt from the requirements of looking for or preparing for work.
Previously, households on UC had to earn the equivalent of 12 hours pay a week (at the National Living Wage). This meant they did not have to meet certain requirements, including looking for work.
Now, the threshold has increased from 12 hours to 15 hours, meaning 120,000 more people will be pushed into earning more in order to be exempt from requirements.
The final of the financial changes happening this month is the deadline for the Household Support Fund. The Household Support Fund was launched in October 2022 in order to help the most vulnerable of Brits through the cost-of-living crisis, especially during the winter months.
Struggling households are eligible for extra financial support through the scheme, however, some deadlines are approaching, with eligible households encouraged to act fast.
Each council has a different deadline, so make sure to contact your local authority if you are unsure. However, all councils have until March 31st 2023 to give out this financial support.