December can be a costly month primarily due to Christmas, but there are significant financial events on the horizon that could impact your finances.
In the upcoming weeks, various financial updates are expected, including a Christmas bonus payment for eligible households. Additionally, updates on inflation rates and interest rates will be provided.
Throughout December, essential winter support programs such as Cold Weather Payments and the Warm Home Discount will be active, offering assistance to households in need.
The Department for Work and Pensions (DWP) is set to distribute its annual tax-free Christmas bonus of £10 to qualifying households. This bonus, traditionally paid in early December, does not affect other benefits and is typically received by January 1.
Inflation data from the Office for National Statistics (ONS) is scheduled for release on December 17, showcasing how prices have evolved over time. The current inflation rate stands at 3.6%, having peaked at 11.1% in October 2022.
The Bank of England will announce its next interest rate decision on December 18. The current base rate is 4%, having undergone five reductions since August 2024. The base rate hike directly influences borrowing costs for customers.
Due to the Christmas and New Year bank holidays falling on Thursdays, benefit payments for many individuals will be made earlier in December. Similarly, self-assessment taxpayers looking to have HMRC collect owed taxes via their PAYE tax code must file their online returns by December 30.
Ongoing support schemes, including Cold Weather Payments, Winter Fuel Payments, and the Warm Home Discount, will continue operating throughout December, providing financial relief to eligible individuals.