What will happen to energy bills and mortgages? Upcoming dates to be aware of – BBC

By Shanaz Musafer
Business reporter, BBC News

Prices are shooting up and millions of people are starting to feel the effects.
The new energy price cap has been announced, but there's more to come as we head into autumn. Here are some of the key dates and events in the coming weeks that are almost certain to mean more belt-tightening.
Parents face the usual task of getting uniforms in time for the new school year. In 2020 the average cost of a uniform for secondary schools was £337, and £315 for primary schools, says The Children's Society charity.
This year, because of rising prices, around a quarter of parents are expecting to spend more than usual, while another quarter will try to reuse old school items rather than buying new, according to Barclaycard research.
Meanwhile, one in five plan to donate their children's old uniforms to others who can't afford new ones. Demand for free school uniforms has rocketed recently, according to one charity.
Parents in Scotland have already had to absorb these costs.
A new law to protect parents in England from unnecessary school uniform costs will come into effect this September. It's meant to prevent families from having to shell out on too many branded items. However, schools that need to find a new supplier have until September 2023 to introduce those changes.
Former chancellor Rishi Sunak and Foreign Secretary Liz Truss are currently fighting it out to lead the Conservative party and become the country's new prime minister.
Mr Sunak has promised more money to help with energy bills depending on the extent of price rises, while Ms Truss has pledged to immediately reverse the rise in National Insurance.
The Bank of England raised interest rates to 1.75% in August and the thought is that they will go up again, perhaps up to 2.25%.
To give an idea of what that might mean, a quarter-point rise on a £250,000 standard variable rate mortgage, paid back over 25 years, could mean paying an extra £30 a month, explains Andrew Montlake, of Coreco mortgage brokers.
And people on a fixed-rate mortgage also face problems. "We're starting to see 'payment shock'," says Montlake, referring to the nasty surprise people get when their fixed period expires and they're faced with higher rates.
He adds that it may take a while to feel the full impact of these rate rises. "Over the next few months and the beginning of next year, when you're faced with an increase in mortgage payments together with an increase in energy payments, that's when people might start to struggle."
Of course any increase in interest rates would be good news for savers, although banks do not always pass on the full rate rise when it comes to their savings accounts. For instance, after the last increase of half a percentage point, Santander only applied that increase to its Help to Buy ISA – the rates on its other saver accounts went up by only a quarter of a percentage point.
Despite all these rising costs, for some households there is some help on the way.
People on disability benefits will receive a one-off cost-of-living payment of £150 from 20 September.
More than eight million low-income households on means-tested benefits will also receive £324 – the second instalment of a cost-of-living payment – this autumn. The first instalment of £326 was made in July.
Those on tax credits have had to wait longer, as the first payment for most will be made between 2 and 7 September, and the second will be made during the winter.
The price cap announced at the end of August will come into effect in October, taking a typical bill to £3,549 a year. This is two-and-a-half times what people paid on average in October 2021.
The cap is the maximum amount suppliers can charge customers in England, Scotland and Wales for each unit of energy, and is meant to protect customers from short-term price spikes. But because electricity and gas prices are going up at the moment, the cap is going up, too.
It will be a "gut punch for households across the UK", says Peter Smith from National Energy Action. "This is simply unaffordable and is going to push many more people into fuel poverty – this means misery, cold homes, debt and unsafe coping tactics."
However, the first instalment of the government's £400 energy rebate will start to arrive about now. A discount of £66 or £67 will be applied to households' energy bills every month until March 2023. How you get it depends on how you pay your bill – see our chart here for more details.
This is a key date for pensioners. The Office for National Statistics will reveal September's inflation figure and it is this figure that will be used to set the rise in the state pension which will come in in April 2023.
After being suspended for a year due to pressures from the pandemic on public finances, the so-called "triple lock" will be restored. This ensures that the state pension will always increase each year in line with either inflation, the average wage increase or 2.5%, whichever is the highest.
With inflation currently running at 10.1% and forecast to go up even further, that would mean pensions will see double-digit rises.
Though this will be welcome news to pensioners, critics have called the move "ludicrous".
Other benefits are also linked to September's inflation rate, including universal credit, disability support and jobseeker's allowance.
There would usually be a budget at the end of October or beginning of November, in which tax rises or cuts, public spending plans, and other measures affecting people's finances would be announced.
But this may depend on whether the new prime minister calls an emergency budget earlier. Ms Truss has said that she will, Mr Sunak has not confirmed whether he would.
Another rise in interest rates could well be on the cards, and so there'll be interest in what the Bank of England has to say about inflation and economic growth. After its last Monetary Policy Report was published in August, the central bank forecast inflation to top 13% by the end of the year and predicted a long recession. Since then, other forecasters have said that inflation could hit 18% next year.
Originally the energy price cap changed every six months, but Ofgem has now said it will change every three months so that price rises and falls will be passed on to customers more quickly. Industry analysts Cornwall Insights predict that the price cap will go up again – this time to £5,386.
Households that receive the Winter Fuel Payment – which is worth £200-£300 and is paid to nearly all homes with at least one person of pension age – will receive an additional one-off £300 in November or December. That should cover nearly all pensioners across the UK.
Christmas Eve is typically the biggest shopping day of the year, apart from Black Friday – the last Friday in November. However, given the energy price rises in October, people will start saving up for presents much earlier than usual, Barclaycard predicts.
Yet another rate rise could come at the end of the year. The Bank of England will assess the impact of its previous actions, but most forecasters expect interest rates to rise to 3% next year, with some saying they could go as high as 4%.
The government announced earlier this month that regulated train fares in England will rise below the rate of inflation next year, though it has not confirmed what the exact figure will be. The rise will come into effect in March 2023.
The next price cap, announced in the autumn, will come into effect.
"Households are going to be hit again at the beginning of January – the height of the heating season and right after Christmas, already an expensive time," says National Energy Action's Peter Smith.
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