The government is issuing a £650 Cost of living payment to some people on certain benefits.
You are likely to qualify for the Cost of living payment if you receive one of the following:
- Universal Credit
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Income Support
- Working Tax Credit
- Child Tax Credit
- Pension Credit.
The Cost of living payment is tax free and won’t count towards the benefit cap.
If you are a pensioner or receive a disability benefit you may also be entitled to a £300 Pensioner Cost of living payment and / or a £150 Disability Cost of living payment. Find out who is eligible for the Cost of living payments and access more information on the Government website.
Cost of living payment: using it effectively
If you are entitled to the Cost of living payment, it might be tempting to use it as soon as you receive it, but it's well worth having a think about how you can benefit the most from the money and what will make the biggest difference to your quality of life. With that in mind, we wanted to provide some ideas of how to spend the money.
1. Pay rent or council tax first
Any housing debts like rent or council tax that you don't currently have a payment plan in place for should be the priority. RENT ALWAYS COMES FIRST!
Get a payment plan in place and pay two months’ worth of payments if you can, so that you're covered if you need to miss a month (for example if your benefits get stopped).
If you are struggling with debts, put this money to one side and seek help to manage the debts as soon as possible.
2. Prioritise high interest debts
Your second priority should be high interest loans, catalogues, overdrafts and credit cards. If there are any of these that you can pay off with the government money, this is well worth doing as it will decrease your monthly outgoings.
Whilst it might not feel like you're gaining or "getting anything" from the money, it will leave you with more money to spend each month. With the rising costs of pretty much everything at the moment, an extra £20 a month could make a huge difference.
3. Put money aside for regular running costs
If you drive, it may be worth filling up your car. Then continue putting in the amount you would usually spend on fuel each week to try to keep it full. Cars tend to run better with more fuel in and this way, if you do have a difficult week, you won't have to panic about trying to find money for fuel.

If you don't drive, consider keeping £20 in an envelope somewhere safe in your house. If you need to get up to hospital or the GP urgently, you will have money to get there no matter what. If £20 isn't likely to be enough for a taxi there and back, then set aside more.
4. Consider buying in bulk
It may be worth stocking up on some of the items that can absolutely ruin your budget if you didn't realise you were running low on them, although it's also important to make sure that you have somewhere suitable to store them.
Items like toilet rolls, laundry liquid/powder, cleaning supplies, binbags, washing up liquid, etc, are also usually cheaper when bought in bulk.
If you have pets, pet food is almost always cheaper to buy in bulk. If your pets are on any medication or supplements, it may also be worth stocking up on these.
5. Plan ahead for unexpected bills
You can also add money into accounts for bills. It's always good to have a little extra wiggle room in case you get an unexpected bill or charge.
If you find that you're always budgeting/spending down to your last few pounds, then it may be worth putting the money in your bank account and using it kind of like an overdraft. So you can make sure that after all your bills have been paid, you make sure that you leave £100 in your account. Imagine that that £100 doesn't exist; when you get down to £100, that means that you're at zero.
It may not sound like a big deal but we all have pretty stressful lives and you can think of this as a bit of an insurance policy against unexpected bills/costs.

6. Use the payment to pay annually instead of monthly
Finally, some services work out much cheaper if you pay them annually instead of monthly.
Amazon Prime is one example of this. If this is something that you use and you will definitely continue to use for the next year, it may be worth paying for an annual subscription. If you have Disney Plus and Tesco Clubcard, it's worth looking at paying for Disney Plus with your Clubcard vouchers, as it works out much cheaper.
If you usually pay monthly for your medical prescriptions, you may find that an annual prescriptions pre-payment certificate is cheaper.
Think about your future budget
No one knows more about your finances than you do, so these are just suggestions for how to make sure you get the most out of the money the government is giving to people.
The fact that they are doing this is extraordinary and it is only because of the severe financial pressure that we are about to face over this coming winter. Whilst it's incredibly tempting to spend this money on a big purchase we are facing a really, really tough time with rising costs. Reducing your monthly outgoings now will mean that you won't be hit quite as hard by the price rises.
This information was originally published as a post on social media and shared with the Young Adult Kidney Group as general suggestions, this is not official financial advice.
If you are struggling with your finances please contact Kidney Care UK for financial and practical support.

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