December is commonly a costly month mainly due to Christmas celebrations, but there are other significant financial developments on the horizon that could impact your finances.
In the upcoming weeks, some households can expect to receive a Christmas bonus payment. Additionally, updates on inflation and interest rates are anticipated.
Various winter assistance programs, such as Cold Weather Payments and the Warm Home Discount, will be active throughout December to aid those in need. The Department for Work and Pensions (DWP) is set to distribute the annual tax-free Christmas bonus of £10 to eligible households, typically issued in the first week of December.
Inflation data from the Office for National Statistics (ONS) is scheduled for release on December 17, with the current rate at 3.6%, having reached a peak of 11.1% back in October 2022.
The Bank of England will announce its next interest rate decision on December 18. The current base rate stands at 4%, having been reduced five times since August 2024 from a high of 5.25%. This rate directly impacts borrowing costs for consumers.
Due to the Christmas and New Year bank holidays, benefit payments for thousands of individuals will be processed earlier next month. If benefits are due on Christmas Day or Boxing Day, payments are likely to be made on December 24. Similarly, benefits scheduled for January 1 will be paid on December 31.
Self-assessment taxpayers wishing to have HMRC collect tax through their PAYE tax code must submit their online returns by December 30, especially if the tax owed is less than £3,000 and they already pay taxes through PAYE.
Throughout December, support schemes like Cold Weather Payments, Winter Fuel Payments, and the Warm Home Discount will continue to provide financial assistance to eligible recipients.