£165 Cost of Living Payment Coming in July 2025 – How to Claim Your Support

Published On: July 14, 2025

The financial year 2024–25 has been nothing short of a rollercoaster for millions of UK households. With rising inflation, unpredictable energy bills, and stagnant incomes, families are struggling to stay afloat.

Recognizing this reality, the UK government has announced a £165 Cost of Living Payment, set to go out in July 2025. While it’s not a huge sum, it’s meant to offer short-term relief for those hit hardest.

Table of Contents

1 Eligibility
2 Payment
3 Fraud
4 Reasons
5 Changes
6 Opinions
7 Future
8 FAQs

Eligibility

Not everyone will receive the £165 payment. The government has made the criteria tighter this time. To qualify, individuals must have received a payment from an eligible benefit scheme between 26 January 2025 and 25 February 2025.

Here are the qualifying benefits:

Universal Credit
Pension Credit
Income-Based Jobseeker’s Allowance (JSA)
Income Support
Child Tax Credit
Working Tax Credit

About 8 million low-income households are expected to receive the payment, which is slightly lower than previous rounds due to the stricter eligibility.

Payment

So how and when will the money show up?

Payment Date: Starts from July 2025
For DWP claimants: It’ll appear in your bank account as “DWP COL”
For HMRC-only claimants: You’ll see it listed as “HMRC COL”

The government expects most eligible people will receive their payment within two weeks of the rollout date. So if you qualify, keep an eye on your bank account.

Fraud

As always, scams are on the rise when money is involved. The Department for Work and Pensions (DWP) has warned that they will never ask for your bank details by phone or text.

If anyone claiming to be from the government asks for sensitive information, don’t fall for it—it’s likely a scam. Stick to the official DWP website or speak with your local advice centre if you’re unsure.

Reasons

Why has the government launched this now?

Well, although inflation has cooled off compared to 2023, most people are still feeling the squeeze. According to the Office for National Statistics (ONS):

Household income dropped by 2.9%
Food inflation is still at 4.7% (down from 19.2% in March 2023)
Energy bills remain above pre-pandemic levels

So, while the broader economy may be showing signs of recovery, the average household isn’t there yet.

Changes

There are two big changes in this cost-of-living scheme:

Smaller Payment – The amount is significantly lower than during the peak of the energy crisis. Back in 2022–23, eligible families got up to £1,350. This year, it’s just £165.
Stricter Rules – Before, being eligible on a single day was enough. Now, you must have been eligible for a full month—from 26 Jan to 25 Feb 2025.

This change helps ensure that only long-term benefit recipients receive the payment, aiming to reduce fraud and target those who need help most.

Opinions

How helpful is the £165 really?

Reactions are mixed. Some say it’s a helpful buffer. Others say it barely scratches the surface.

James Bartle, 58, from Cardiff: “My energy bill alone is £90, so this won’t stretch far.”
Karen Wilson, single mother in Manchester: “It’ll help with my kids’ school needs—better than nothing.”
Michael Ashford, from the Money Advice Trust: “It’s immediate relief, but not a fix.”

Experts agree—it’s a stopgap, not a solution.

Future

Will there be more payments like this?

Right now, that’s up in the air. The Treasury says future plans depend on how the economy evolves. The Institute for Fiscal Studies believes the financial strain on low-income families might continue until mid-2026.

And according to Trussell Trust, demand for food banks will likely stay high throughout 2025—even with this payment in place.

This £165 payment in July 2025 won’t fix everything, but it might help many families catch their breath. It shows that the government is at least acknowledging the financial stress people are under.

Whether it’s enough—or whether more is coming—is still unknown. But for now, make sure you’re eligible, stay alert for scams, and reach out to support services if needed.