Many people are worried about managing their mental health and money as a combination of welfare cuts and price rises begin in October 2021.
This guide summarises everything you need to know. It provides practical advice and tips on looking after both your mental health and money this winter.
Welfare benefit cuts and price rises from October 2021
- The following welfare cuts and price rises in October 2021 have been announced:
- Universal Credit will decrease by £20 per week.
- Energy prices are expected to rise by 12% to a maximum of £1,277 per year per household for gas and electricity (for standard variable energy tariffs).
- The Coronavirus Job Retention Scheme, known as furlough, will stop on 30th September 2021.
- Some National Insurance contributions (NI) will increase by 1.25 percentage points from 6th April 2022.
What impact will the cuts and price rises have on me?
We understand people will be worried about the impact of benefit cuts and price rises. So we explain what these changes could mean for you or your family.
Universal Credit (UC) and the end to furlough
The cut to Universal Credit
- As of July 2021, 5.9 million people were claiming Universal Credit.
- With an estimated 1.3 million people claiming Universal Credit with poor mental health, this £20-per-week cut is expected to impact some people's lives significantly.
- The end of the furlough scheme
- 1.6m people were claiming furlough at the end of July. Although this number has decreased over time, many people could potentially lose their job and navigate a complex benefits system for the first time.
- People who have never faced financial hardship could find themselves worrying about money.
- After such a long time working from home because of the Covid-19 pandemic, some people may find the return to work or increased hours, affecting their mental health. This Rethink Mental Illness guide on how to manage feelings of anxiety as lockdown eases can help, while Mental Health UK explains how to manage stress as lockdown eases.
Increase in energy prices and the rise in National Insurance
The increase in energy prices and National Insurance contributions announced in 2021 are expected to impact people worrying about money and mental health.
This is especially true as worrying about money, eating unhealthily and having an improperly heated home are three factors that can negatively impact your mental health.
You might be worried about:
- How to heat your home during winter.
- How to pay for food.
If you expect your mental health and money to be affected by one of the benefit cuts or price rises, you must take action immediately.
We have listed several tips which you can access at this link to help you understand, manage & improve your mental health and money issues during this challenging period.