Four government measures meant to ease the cost of living are set to start on April 1 – but will they be enough to help Brits?
Iranian forces continue to effectively block the major shipping lane, the Strait of Hormuz, in response to US–Israeli strikes.
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The closure of the waterway, which transports a fifth of the world’s oil supply, is rocking international markets and sending fuel costs skyrocketing.
Brits were already facing a financial squeeze before the conflict began at the end of February.
The latest Which? consumer insight tracker – recording from the month leading up to March 13 – found half of UK households are now making at least one adjustment, like selling their possessions or getting loans, to cover the cost of essentials on a daily basis.
The watchdog also found 67% of UK adults are now expecting the national economy to worsen over the next year.
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However, the government has urged the public to carry on as usual while it puts “contingency plans” in place.
Keir Starmer also launched Labour’s local elections campaign on Monday by insisting his party understands “most people are concerned most of all about the cost of living”.
In a separate statement, the prime minister promised the public that they “have a government on their side, working with allies on de-escalation and bearing down on the cost of living.”
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But, he admitted: “We must go further to bear down on costs, and that means pushing for de-escalation in the Middle East and a re-opening of the Strait of Hormuz.
“That is the best way we can bring down the cost of living for families and that is my focus.”
Here’s a quick look at the measures the government is introducing on Wednesday – and their effectiveness…
1. Increasing The National Living Wage and National Minimum Wage
The government will be increasing the National Living wage to £12.71.
That works out to a £900 increase for 2.4 million workers aged 21 and over.
More than 200,000 young workers – those aged between 18 to 20 – will also enjoy a hike of £1,500 per year as the National Minimum wage goes up to £10.85.
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The director of the Living Wage Foundation, Katherine Chapman, said last November – when the change was announced – that this was “a really positive move’.
However, she claimed: “It will still fall short of the voluntary real Living Wage which is the only wage rate based solely on the cost of living.
“The real Living Wage is currently £13.45 in the UK with a higher rate of £14.80 in London.”
Chair of the Low Pay Commission, Philippa Stroud, also warned about the impact rising wages would have an businesses.
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She said in November: “In our discussions this year with workers and employers alike, it has been clear that no one is having an easy time.”
2. Cutting Energy Bills
The energy regulator Ofgem has decided the energy price cap will be set at £1,641 per year between April 1 and June 30.
That’s a decrease of 6.6% compared to between January 1 and March 31, when the annual price cap was at £1,758.
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However, the April-June cap was decided prior to the breakout of the Iran war.
The next cap, from July to September, will likely go up as a result of the conflict.
Chancellor Rachel Reeves is looking at plans to help with energy bills expected to get closer to nearly £2,000 a year from July.
The government has suggested it may implement some targeted households for those most in need, rather than the universal support offered by Liz Truss’s government in 2022.
Jess Ralston, the head of energy at the Energy and Climate Intelligence Unit, said: “Bills going up again because of war thousands of miles away will be a tough pill to swallow for households still saddled with debt from last time.”
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3. Freeze On Prescription Prices Extended
NHS prescription charges in England have been frozen at £9.90 per item for the 2026/27 financial year to help with financial pressures.
Prescriptions will still be free in Scotland, Wales and Northern Ireland.
However, the Prescription Charges Coalition’s Laura Cockram pointed out that people living with long-term conditions who are not exempt still feel the cost is too high.
She said: “No one should have to worry about affording the medication they need to stay well, so although a freeze on prescription charges is more welcome than an increase it’s not enough.
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“Unlike in Scotland, Wales, and Northern Ireland, people in England with Parkinson’s and other long-term conditions still have to pay for the prescriptions they need to manage their health. The UK government must rethink.
“At the least, the government should review the prescription charge exemption list so people with long-term conditions like Parkinson’s, MS, asthma, HIV don’t have to pay an ill health tax.”
4. Crisis and Resilience Fund
This £1 billion a year council-run scheme in England will start running from April 1 2026 until March 31, 2029.
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It’s money from the government which can be used for people struggling with a financial shock or unexpected finances. The fund will be focused on those who are in or close to poverty, disabled or in older households.
Anyone can apply for the fund for money towards their energy bills, food, clothing and furniture.
It will replace the Household Support Fund which has now ended.
It’s thought the government may pump extra cash into the fund if fuel and energy costs do rise in the summer.
Anti-hunger charity, the Trussell Trust, welcomed the news, calling it a “major milestone”.
“Effective crisis support is crucial to prevent people from falling into severe hardship, so they can still afford the essentials we all need,” the charity said.
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However, it warned there is still work to do and “is not a substitute for the deeper reforms needed to the inadequate rates of social security which fail to protect people from going without the essential day to day”.
