6 money changes to be aware of in May - and how they will affect you

By Isabella Boneham
Published 3rd May 2022, 11:31 BST

In May there will be some huge financial changes and deadlines affecting Universal Credit, your Tesco Clubcard points and more.

The money changes come after April saw a huge increase in bills across the board as the cost of living crisis deepens.

Hide Ad
Hide Ad

Here we explain all the major financial changes and deadlines over the next four weeks and how they will affect you.

What are the financial changes in May?

Rise in interest rates 

Interest rates are expected to increase from 0.75% to 1% this Thursday 5 May.

This increase would be the highest level for 13 years as the Bank of England is battling to decrease inflation which hit a new 30 year high in March of 7%.

Inflation is expected to reach 8% later this year.

The base rate is what the BoE charges other banks and lenders - this affects what you are charged if you borrow money, and how much interest you get back on your savings.

Hide Ad
Hide Ad

For those with a mortgage, if you have a fixed-rate deal then your rates won’t change if interest rates are hiked.

If you are on a tracker mortgage and interest rates are hiked, then your rates will go up as these move in line with the base rate.

Those who are on a standard variable rate (SVR) mortgage may see rates increase, as it’ll be down to your lender to decide whether to pass on the increase.

For savers, interest rate rises are generally good news as it means you could see a higher return on your money - if you have got a variable rate account.

Hide Ad
Hide Ad

However, there is no guarantee that banks and lenders will move in line with a potential hike.

Some also may take time to announce any changes.

Universal Credit

Up to 2.6 million people on old-style legacy benefits are expected to move over to Universal Credit from 9 May.

This process had been paused due to Covid - but the Government wants everyone to be moved over by the end of 2024.

People will start getting a “migration notice” in the coming months.

Hide Ad
Hide Ad

There will be a three-month deadline to claim Universal Credit or you will have your benefits stopped.

Only around 500 people will be moved to Universal Credit at first, but the Department for Work and Pensions (DWP) will step up the pace after a few months.

Those being affected are benefit claimants who get the following payments:

  • Working Tax Credit

  • Child Tax Credit

  • Income-based Jobseeker’s Allowance

  • Income Support

  • Income-related Employment and Support Allowance

  • Housing Benefit

If you claim the above benefits and want to move to Universal Credit straight away, you can ask to be moved over now.

But it is advised to do your research first.

Hide Ad
Hide Ad

Officials say 55% will be better off on the Universal Credit, but some will be worse off in the long term.

You can’t move back to the old-style benefits once you’re on Universal Credit.

You can use an online benefits calculator from charities such as Turn2Us and EntitledTo to see how the change will affect you.