December can be a costly month primarily because of the holiday season, but there are significant financial developments on the horizon that could impact your finances.
Households can anticipate a Christmas bonus payment, along with updates on inflation and interest rates in the upcoming month. Additionally, various winter assistance programs, such as Cold Weather Payments and the Warm Home Discount, will be active throughout December.
The Department for Work and Pensions (DWP) is set to distribute its annual tax-free Christmas bonus of £10 to eligible households. This bonus, traditionally paid in the first week of December, does not affect other benefits and is expected to reach recipients by January 1, provided they are claiming specific benefits.
Inflation data from the Office for National Statistics (ONS) is scheduled for release on December 17, with the current inflation rate at 3.6% and reaching a peak of 11.1% in October 2022. The Bank of England will announce its next interest rates on December 18, with the current base rate standing at 4% after five reductions since August 2024 from its peak of 5.25%.
Due to the Christmas and New Year bank holidays falling on Thursdays and Fridays, thousands of benefit recipients can expect early payments in December. Benefits due on these holidays will likely be disbursed on the preceding business day to ensure timely access to funds.
Self-assessment taxpayers opting for HMRC to collect owed taxes through their PAYE tax code must submit their online returns by December 30. This option is available for individuals with tax bills under £3,000 who already pay taxes through PAYE.
Throughout December, support schemes like Cold Weather Payments, Winter Fuel Payments, and the Warm Home Discount will provide financial relief to eligible households facing winter challenges.