5 DWP cost-of-living changes in May 2024 you need to know about

A number of cost-of-living and money changes are set to take place next month. The Department for Work and Pensions (DWP) has announced the changes which could affect millions of people in Wales and across the UK.

It follows major changes in April which saw a 6.7% increase to state benefits including universal credit, PIP, ESA, DLA and income support. Pensioners also saw a boost with the state pension rising by 8.5%, bringing the full new state pension to £221.20 per week.

April also saw the energy price cap fall by 12% to £1,690 a year for a typical household, while there are also increases to the annual TV licence fee, car tax changes and increases to national living wage. You can read more about the money changes in April here.

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In May there will be further changes which could have a big impact on your wallet. These will mainly affect you if you claim certain benefits such as universal credit, with changes to work requirements and alterations to payment dates due to two bank holidays also on the cards. Here are all the money changes you need to know about it May. To get the latest money stories straight to your inbox twice a week sign up to our newsletter here.

New higher benefit payments - May

Although the DWP introduced the new benefit rates from April, the way benefits are paid means many will not see the new higher rates reflected in their payments until next month. This is because many benefits are paid monthly or every two weeks.

For example, the way universal credit is calculated is based on your "assessment period" which takes into account your circumstances each month, such as earnings and savings. The increased rate will not be paid until a new universal credit assessment period begins on or after April 8. You usually get your money seven days after each monthly assessment period. This means most people on universal credit won't see any increase in their payment until May or June. You can read more about that here.

Bank holiday payment changes - May 6 and May 27

The Department for Work and Pensions (DWP) has announced the changes in May for people on certain benefits. This is because there will be two bank holidays on May 6 and May 27, meaning anyone due to get universal credit or other benefits on those dates will, in most cases, receive their money earlier.

If you are due to receive benefits on Monday, May 6, you will receive your money on Friday, May 3, instead. If you are due to get your benefits on Monday, May 27, you'll be paid on Friday, May 24, instead.

The bank holiday changes will apply to the following benefits:

• Attendance allowance
• Carer’s allowance
• Child benefit
• Disability living allowance
• Employment and support allowance
• Income support
• Jobseeker’s allowance
• Pension credit
• Personal independence payment (PIP)
• State pension
• Tax credits
• Universal credit

Interest rates decision - May 9

The Bank of England meets several times a year to set the base rate of interest, which is used to keep inflation under control and which can affect things like mortgage repayments for millions of households. In the past two years the bank has been increasing the rate in a bid to combat inflation, which peaked at 11.1% in October, 2022, but fell to 3.2% in March.

In March the base rate was held at 5.25% and it is unclear what the new rate will be in May. Experts had previously been hoping for a cut to the rate in May or June but this may not happen until August or September. Get the best user experience with WalesOnline’s Premium app on Apple or Android

Universal credit changes - May 13

Major changes which will affect thousands of universal credit claimants who work are set to come in next month too. The administrative earnings threshold (AET) sets the minimum wage levels for people to receive full benefits without having to look for extra work. Previously, people needed to work around nine hours a week to get full benefits, but from May 13 the minimum wage levels for benefit claimants who have work requirements will rise to £892 per calendar month for individuals and £1,437 per calendar month for couples. This is equivalent to an individual working 18 hours per week at the national living wage or couples working a total of 29 hours per week at the same wage rate.

For 180,000 people it means you will have to work more hours in order to receive full benefits, or you could be sanctioned or have your payments stop entirely. You can find out more about that here.

State pension age compensation bill for WASPI women second reading - May 17

Next month there will be a second reading of the State Pension Age (Compensation) Bill for women impacted by changes to the state pension age. In March, after a six-year investigation, the Parliamentary and Health Service Ombudsman (PHSO) said women born in the 1950s who were affected by short notice changes to their state pension age should be compensated.

The Ombudsman then asked the UK parliament to intervene and “act swiftly” to make sure a compensation scheme was established. A bill which would allow a compensation scheme to go ahead was due to have its second reading in April, but this has been delayed until May 13. You can read more about it here.