Help needed paying bills: I’m a retired nurse and just had a big rent hike I can’t afford
I am a retired registered nurse. I currently receive £1,341.78 a month from two work pensions and my state pension.
I am renting privately and my rent has been increased from £500 to £695 because my landlady says her mortgage rate has gone up.
After my bills have been taken out of my account I am left with just over £100 a week. I have applied for an increase in my current housing benefit (£45 a week) but have been advised that I am receiving the maximum amount I can get.
Is there any way of receiving any other monies to pay my living costs. I drive to keep myself independent and running costs/petrol of course is a weekly outgoing.
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Steve Webb replies: The increase you have faced in your monthly rent is clearly very substantial and I can understand why this has put a squeeze on your finances.
I will try to explain why your housing benefit did not immediately increase when your rent went up. But I will also share what I hope is a glimmer of good news based on a little-noticed announcement in the recent Autumn Statement.
As a private renter, your housing benefit is not based on your actual rent. Instead it is based on something called your ‘local housing allowance’.
In 2012/13, the LHA was set to match or exceed the rent level of the cheapest 30 per cent of rented properties in your area.
Since then, LHA rates have been squeezed, then re-set at the 30 per cent threshold during the pandemic before being frozen since then.
The political justification given for imposing the 30 per cent threshold is that people on benefit should not be able to choose the nicest properties in an area and get their rent covered in full by the taxpayer.
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Instead, the taxpayer will only pay up to the rent on a relatively modest property, regardless of your actual rent.
Because LHA rates are only changed once a year (if at all), and because it is the LHA rate which determines how much benefit you can get, this is why your housing benefit did not increase as soon as your rent went up.
There is another important respect in which the LHA rate may not reflect your actual rent. The LHA rate to which you are entitled is based on the size of property that you are deemed to ‘need’ rather than the size of property that you have chosen to live in.
For example, although I don’t know for sure, from your question I’m guessing that you may live alone.
If so, you would typically only be entitled to the LHA rate for a one-bedroom property, even if you are actually living in something larger.
This rule can lead to a significant shortfall between the rent that you are paying and the amount covered by benefit in some cases.
Where people are really struggling and perhaps have some particular or exceptional need, they can apply to their local authority for what are called ‘discretionary housing payments’.
Although these are designed to be an exceptional and temporary top-up to housing benefit they can be useful and you could consider applying if the latest rent increase has caused you particular hardship.
However, the glimmer of good news is that the Government has finally accepted that the long-term freeze on LHA rates has gone on long enough, especially given the continued rise in rent levels.
It was announced in the Autumn Statement in November last year that LHA rates will be re-set so that they once again cover the bottom 30 per cent of rent levels in each local area.
The Government says that this measure will benefit around 1.6million households, with an average gain of £785 per year from April 2024.
The exact impact on you will depend on what has been happening to rent levels in your local area since the freeze on LHA rates began and on the size of the property you are deemed to need.
In case it is of interest you can use this government website to find out the LHA rate for the current year (2023/24): Search for Local Housing Allowance rates by postcode or local authority.
If you enter your postcode this will tell you what ‘broad rental market area’ you come under and then you can find out the current maximum LHA for a property with the number of bedrooms you are deemed to need.
Once you know which area you come under, you can then look at the expected rates of LHA for 2024/25 here: Indicative Local Housing Allowance rates for 2024 to 2025.
Hopefully you should see a significant increase.
Remember however that the LHA figure is simply the starting point for the calculation of your benefit.
As you know, you currently receive only partial help because your income is above pension credit levels and a similar tapering of help will apply next year, albeit based on a higher LHA figure.
I hope that this change in LHA rates, coupled with the annual increase to state pensions and your private pensions, will mean that your financial situation eases slightly from April onwards.
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