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With the ever-increasing cost of energy bills and other essentials, households on the lowest incomes are seeing a continuous squeeze on their budgets. For those on fixed incomes like Universal Credit recipients, household expenses can quickly grow larger than household incomes.

Many will begin to see debts and arrears start to grow as their essential costs get more and more expensive. However, there are lots of free schemes and cash grants on offer from charities and local councils which can help to reduce these fixed costs and bills, from massive council tax and gas bill reductions, to help purchase clothes and food.

As these services and grants are offered with no expectation of being paid back, they can be essential for helping people escape a spiral of debt or financial stress. Many of these schemes and grants are dependent on your local area, so we have included some of the best grant eligibility websites in our list.

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Get a huge council tax discount

Many people on low incomes and Universal Credit are unaware that they can get a big discount on one of the largest household bills – council tax.

This reduction is administered by your local council but can range from getting a quarter off your bill to paying nothing whatsoever. The size of the discount depends on your income, savings, as well as how many dependents you have and who you live with.

It’s aimed at reducing the tax burden on those with the lowest incomes and those claiming benefits, though it also offers reductions for those who take on caring responsibilities.

In addition to the £150 council tax rebate being offered by the government in response to the cost of living crisis, this could mean a much-reduced tax bill for low-income households.

You can use the government’s postcode checker to see who your local authority is and direct you to their website. You will need to live in a property that is in council tax bands A-D, and many local councils will also have a discretionary fund available for households not eligible.

Millions of families to receive a one-off £650 cost of living payment

The government announced a raft of measures to counter the cost of living crisis including a one-off £650 cash payment to eight million households ( Getty Images/iStockphoto)

In a late move to help the lowest income families with spiralling food and energy costs, Chancellor Rishi Sunak has announced that eight million households on Universal Credit will get an additional £650 this year.

This will be paid directly into people’s bank accounts in two instalments of £325. The first payment will come as soon as July, while the second is billed for sometime in autumn.

In addition to this, the chancellor announced that the previous £200 energy bill discount would be doubled to £400 for all households and would be a non-repayable grant rather than a loan. Rather than going straight into bank accounts, this will be spread over six months and will act as a monthly reduction for anyone on a monthly tariff.

People claiming disability benefits will receive a £150 cost of living on top of these payments, taking their total cost of living discount to £1200.

Free cash grants and bill reductions

Despite the government’s announced cost of living package, many households on low incomes will still face higher prices in the supermarket and have to make their pounds stretch further to keep the gas meter ticking over.

There are loads of local charities and organisations that are trying to help people who are struggling with the cost of living crisis by offering cash grants or bill reductions, you can search for them all using the Turn2Us grant eligibility calculator.

On top of the government’s energy bill assistance, many utilities providers also offer hardship funds for customers on low incomes, as well as affordable repayment plans to stop debt from spiralling. For example, British Gas is giving out up to £750 to some of its struggling customers, while the charity Water UK has a long list of cash grants and bill reductions for people struggling to pay their water tariffs.

Free council grants for food, clothes, and rent

The Household Support Fund was set up in late 2021 so that local councils could support families struggling to make ends meet ( Bloomberg via Getty Images)

A £500m Household Support Fund has been set up by central government for local councils to handout to struggling families and, while it varies in each area, provides help buying food, clothes, and other essential goods.

Separately, local authorities also offer grants to housing benefit or Universal Credit claimants that can help them cover the cost of rent. These grants are offered on a case-by-case basis as judged by the council.

Some also offer support through the welfare support fund, which helps with covering the cost of essentials, from buying new furniture to food and other large weekly bills. These grants can be as much as £1000, but depends entirely on where you live and how much help is on offer

You can find out who your local council is by visiting the gov.uk website and get in touch with them about whether help is available in your area.

Warm Home Discount to be rolled out further

With ever-rising gas and electricity prices, many who were already struggling to make ends meet have been left wondering how they can afford any further rises – with the energy price cap set to rise to £2800 in October.

The Government has decided to expand its Warm Homes Discount to include low-income families and those receiving Pension Credit. Previously, pensioners receiving Pension Credit got this automatically while benefit recipients had to apply for this discount on a first-come-first-served basis.

This year the £140 grant has been bumped up to £150 to help tackle household energy bills, but will not be paid out for months yet. Those eligible are due to be contacted before October by their utility supplier regarding the discount, if you believe you have been missed out you can contact the government’s helpline.

In his emergency cost of living announcement, the chancellor said that this payment would be doubled to households where at least one person is claiming the Pension Credit.

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