The Household Support Fund will be available to households in the UK and will be distributed by local councils. It comes as the furlough scheme officially ends today, September 30, with over a million people still on the scheme expecting to either return to work or be out of a job by the end of today.
The fund will be issued in small grants to help meet daily living costs, such as food, clothing, and utilities.
Thérèse Coffey, Secretary of State for Work and Pensions, said: “Over the last year, we have helped millions of people provide for their families.
“Many are now back on their feet but we know that some may still need further support.
“Our targeted Household Support Fund is here to help those vulnerable households with essential costs as we push through the last stages of our recovery from the pandemic.”
Chancellor Rishi Sunak said: “Everyone should be able to afford the essentials, and we are committed to ensuring that is the case.
“Our new Household Support Fund will provide a lifeline for those at risk of struggling to keep up with their bills over the winter, adding to the support the government is already providing to help people with the cost of living.”
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Fidelity International’s investment director, Maike Currie, told the BBC that “no-one really knows what is next” as furlough comes to an end.
They said: “I think what we can be certain of is that we’ll see under-employment, where employees return to work but possibly not on a full-time basis and that they might need to supplement their income.”
It also comes as news of gas shortages spark rising energy costs and a crisis in the sector, with multiple suppliers going bust in recent weeks.
Natural gas prices have soared to record highs in Europe because of tight supplies ahead of winter after unusually cold temperatures last season.
In August alone, they rose by more than 70 percent, forcing some of the UK’s smaller energy suppliers out of business.
Though storage would usually be refilled during summer months when demand is slow, it has not happened at its normal pace in 2021.
Lower solar and wind output is another reason for the shortages of energy.
The UK and Europe has been phasing out coal plants in recent years, and less windy weather in recent weeks has lowered their contribution to the grid, resulting in unprecedented demand for natural gas.