As we approach the end of 2025, the festive season is upon us, but for many, it's a time of increased financial strain. With higher bills and colder temperatures, the cost of living continues to be a daily battle for millions across the UK. Despite inflation returning to pre-pandemic levels, the reality is that goods remain expensive, and wages have stagnated. This has led to a situation where millions are struggling to make ends meet, with debts mounting as they try to afford the essentials.
Recent research by the Trussell Trust paints a stark picture, revealing that a staggering 14 million adults are going without food due to financial constraints. Energy arrears have also skyrocketed, reaching a staggering £4.4 billion by the end of June. The Joseph Rowntree Foundation warns that low-income families in the UK are facing the worst fall in living standards on record, with the next election in 2029 looking particularly bleak.
In these challenging economic times, it's crucial for households to claim all the support they are entitled to. Currently, around 24 million people in the country are receiving some form of DWP-administered benefits, including those drawing a state pension. This represents approximately one-third of the population. However, Policy in Practice's research highlights a concerning trend, with £24 billion worth of benefits going unclaimed each year. Their calculator can help you determine what you might be eligible for.
If you're facing difficulties with the DWP or the cost of living this Christmas, we want to hear your story. Share your experiences by emailing albert.toth@independent.co.uk.
Now, let's delve into the financial support available to households this December and highlight some key dates for benefit and state pension recipients.
Benefit Payment Dates in December
Most benefit payments will be made as usual during December. These include Universal Credit, State Pension, Pension Credit, Child Benefit, Disability Living Allowance (DLA), Personal Independence Payment (PIP), Attendance Allowance, Carer's Allowance, Employment Support Allowance (ESA), and Income Support. However, it's important to be aware of several bank holidays that will impact payment dates.
If your payment is due on Thursday, December 25th (Christmas Day), you should receive it on Wednesday, December 24th (Christmas Eve). Similarly, payments due on Friday, December 26th (Boxing Day) will also be made on Christmas Eve. A few days later, Thursday, January 1st (New Year's Day) is also a bank holiday, so payments due on this day will be made on Wednesday, December 31st (New Year's Eve). For more detailed information on benefit payment schedules, visit the government's website.
The DWP is working towards migrating all "legacy benefits" to Universal Credit by January 2026. Those receiving tax credits, income support, jobseeker's allowance, and housing benefit should have already received a notice about the transition to Universal Credit.
If you're experiencing issues with PIP, Universal Credit, or any other benefit, please reach out via email: albert.toth@independent.co.uk.
Pension Payment Dates in December
The basic state pension is paid directly into bank accounts, similar to benefit payments. It is typically paid every four weeks, with the specific day determined by the last two digits of your National Insurance (NI) number.
Here's a breakdown of the payment days based on your NI number:
- 00 to 19: Monday
- 20 to 39: Tuesday
- 40 to 59: Wednesday
- 60 to 79: Thursday
- 80 to 99: Friday
The same bank holiday payment date changes that apply to benefits will also affect state pension payments.
When Will Benefit Rates Go Up?
In April 2026, all Universal Credit claimants can expect an above-inflation income boost of around 6.2% to the standard allowance. For a single person over 25, this will result in a £6 weekly increase, rising from £92 to £98. For couples with one or both partners over 25, it will be an increase of £9 per week, increasing from £145 to £154.
Most other benefits, including PIP, DLA, attendance allowance, carer's allowance, and ESA, should see an increase of 3.8% based on September's inflation rate. However, there's a catch: the monthly payment rate for the health-related element of Universal Credit for new claimants will be reduced from £105 to £50. The rate for existing claimants will also be frozen until 2029.
This reduction amounts to over £200 per month, cutting the additional rate by approximately half. Therefore, it's advisable for anyone who thinks they might be eligible to apply as soon as possible.
The state pension will also increase by 4.8% from next April, in line with annual earnings growth, as confirmed by the government. This will bring the weekly amount to £241.05.
For more detailed information on the new benefit rates, you can refer to The Independent's comprehensive guide.
Other Help Available
Budgeting Advance Loans
The government offers "budgeting advance loans" to individuals on Universal Credit who find themselves in an emergency financial situation. These loans have a maximum repayment period of two years and are interest-free. They are automatically deducted from Universal Credit payments.
You can borrow an "advance" of up to:
- £348 if you're single
- £464 if you're part of a couple
- £812 if you or your partner claims child benefit
Following Labour's 2024 Budget, a new cap was introduced on the amount the DWP can deduct from benefit payments to repay loans and debts, including budgeting advance loans. Beginning in April 2025, deductions from Universal Credit have been capped at 15% of the standard allowance, down from 25%.
Discretionary Housing Payment
Households can apply to their local council for a discretionary housing payment (DHP), which provides financial support to cover rent or housing costs. You can only receive a DHP if you are in receipt of housing benefit or the housing element of Universal Credit. It can assist with housing costs for rent shortfalls, rent deposits, and rent in advance if you need to move.
Eligibility and the funds available are determined on a council-by-council basis, so you'll need to contact your local authority for more information.
Household Support Fund
The household support fund (HSF), distributed by local councils, offers vital financial assistance to those facing hardship, complementing standard benefits and grants. As part of this government initiative, eligible households across the UK can access support such as essential appliances, contributions towards utility bills, and direct cash payments of up to £300.
Local authorities have the freedom to allocate their HSF funding based on the needs of households in their area, so the exact support available will vary. To apply, households should contact their council, as most offer an online application form.
This nationwide programme is set to continue until March 2026. The government has committed £1 billion in funding to transition it into a "Crisis and Resilience Fund," which will replace the DHP.
Charitable Grants
If you're struggling financially, you may be eligible for various charitable grants. There is a wide range of grants available, depending on your circumstances.
However, these grants typically come with specific criteria and offer limited funds. Charitable grants are available for people who are disabled or ill, carers, bereaved, unemployed, students, and many others. The charity Turn2us has an online tool to search for grants that may be applicable to your situation.
Energy Provider Help
Several energy suppliers offer assistance to those struggling with their energy bills. These include British Gas, Scottish Power, EDF, E.ON, OVO, and Octopus. It's worth contacting your energy provider to determine your eligibility.
Some energy companies also provide free devices like electric blankets for households with vulnerable residents to stay warm.
Social Tariffs for Broadband and Water
For those struggling with household costs, social tariffs are available for both broadband and water bills. These tariffs offer reduced rates for eligible households.
Every water company operating in the UK is legally required to have a social tariff. However, the amount of support varies between regions, and because water providers cannot be chosen like energy providers, the support has been criticized as a "postcode lottery."
Some water companies offer as much as 90% off bills, while others cap support at a 20% reduction. To find out what support your water company provides, check their website or contact their helpline. In all cases, households must be deemed to have a low income and/or receive certain benefits.
Similarly, many broadband providers offer social tariffs to those on specific benefits like Universal Credit or Pension Credit. Regulator Ofcom has a guide outlining the options available.
Council Tax Reduction
If you meet certain criteria or are on specific benefits, you may be eligible for a discount on your council tax of up to 100% (sometimes called council tax support).
Your local council may also offer a discretionary reduction if you can demonstrate severe financial hardship and are unable to pay your council tax.
To apply for a council tax reduction, contact your local council via the government's website.
Up to 30 Hours of Free Childcare
From September 1, 2025, all working parents in the UK became entitled to 30 hours of free childcare for children up to the age of four. This marks the culmination of a series of gradual expansions that began in April 2024.
Parents must apply online and reconfirm their eligibility every three months, in time for each school term. Working parents can also apply for tax-free childcare, which provides a 20p refund for every 80p spent on childcare, up to a maximum of £500 per year.
Energy Price Cap: Is It Going Up?
Ofgem's energy price cap increased by 2% in October, from £1,720 to £1,755. The £35 rise follows a more significant 7% decrease for July to September, from £1,849 to £1,720.
For the period from January 1 to March 31, 2026, the price cap will rise to £1,758, as confirmed by Ofgem - an increase of 0.2%.
The energy price cap is the maximum amount energy suppliers can charge for each unit of energy if you're on a standard variable tariff, which includes most households. It is expressed as an annual bill for an average home.
Many experts, including Ofgem, recommend that households consider fixed tariff energy deals, as many are offering rates lower than the price cap.
Will There Be Another Cost of Living Payment in 2025?
The DWP has not announced any continuation of the Cost of Living Payment scheme, which ran from 2022 to 2024. The final payment should have been made to eligible households between February 6 and February 22, 2024.
Mental Health Support
- In the UK and Ireland, Samaritans is available 24/7. You can call them for free on 116 123, email them at jo@samaritans.org, or visit samaritans.org to find your nearest branch
- Mind operates a support line on 0300 102 1234, providing a safe and confidential space to discuss your feelings. They also have an information line on 0300 123 3393 for local support and a welfare benefits line on 0300 222 5782 to support those navigating the benefits system
- Disability charity Scope has a forum where people can connect and chat with others going through similar experiences
- The NHS offers an online mental health triage service
Remember, it's important to seek support for your mental health, especially during challenging times.
