The year 2024–25 has been one of the toughest in recent memory for households across the UK. Rising inflation, shrinking incomes, and the lingering energy crisis have made day-to-day life a struggle for millions.
To ease the pressure, the UK government has announced a new one-off payment of £165 as part of the Cost of Living Support scheme, starting in July 2025. While it may not seem like much, for many families, it’s a small but welcome lifeline in challenging times.
Eligibility
This year, the eligibility rules are stricter than ever. To receive the £165 payment, individuals must be receiving one of the qualifying benefits between 26 January 2025 and 25 February 2025. These include:
- Universal Credit
- Pension Credit
- Income-Based Jobseeker’s Allowance
- Income Support
- Child Tax Credit
- Working Tax Credit
This tightened window ensures the support reaches only those who genuinely need it. Government estimates show around 8 million households will qualify—fewer than in previous years.
Payment
The process is simple but specific. The government will begin making payments in July 2025. Here’s how you’ll see it in your bank account:
| If you receive via | Payment will appear as |
|---|---|
| DWP | DWP COL |
| HMRC (Tax Credit only) | HMRC COL |
Most people should get their payment within two weeks of the rollout starting.
Caution
With every support scheme, scammers try to take advantage. The government is warning people to be alert. They will not contact you by phone or message asking for bank details. If someone does, it’s likely fraud. Always use official websites and contact trusted local advice services if you’re unsure.
DWP spokesperson Thomas Hargreaves stressed the importance of staying alert and only relying on verified information.
Reason
So, why this payment now? Inflation has eased a bit, but people are still struggling. According to the Office of National Statistics (ONS), household incomes have dropped by 2.9%, and although food inflation has come down to 4.7% in January 2025 (from 19.2% in March 2023), it’s still high enough to cause pressure.
Energy bills, although lower than during the peak of the crisis, are still much higher than pre-COVID levels. Many families have drained their savings and are barely hanging on. Experts like Dr. Eleanor Jameson say that while the numbers suggest improvement, real-life financial conditions haven’t caught up yet.
Difference
This year’s scheme is smaller in scale than before. In 2022–23, during the peak of the energy crisis, the government handed out up to £1,350 per household. This time, it’s just £165.
According to former Budget Responsibility Office chief Robert Chot, the cut reflects a shift in government priorities. With economic indicators improving and fiscal pressure mounting, the government is trying to balance immediate relief with long-term budget control.
Another big change is the eligibility criteria. Previously, being eligible on just one qualifying date was enough. Now, you must be a benefit recipient for an entire one-month period—a tougher standard to meet.
Impact
Not everyone is thrilled with the £165 amount. James Bartle, 58, a pension credit recipient from Cardiff, says it’s welcome but won’t go far, especially when energy bills alone cost £90 per month.
Karen Wilson, a single mum from Manchester on Universal Credit, sees it differently—she plans to use it for school supplies without needing to cut back on food.
Michael Ashford from the Money Advice Trust says while this is a short-term boost, the country needs long-term financial solutions.
Future
Will similar payments happen again? For now, there’s no clear answer. The Treasury says any future support will depend on the economy and available funds.
Analysts predict inflation may ease further in 2025, but normalcy for low-income families might not return until mid-2026, according to the Institute for Fiscal Studies.
Food aid centres and debt support charities are preparing for continued strain. William Davies of the Trussell Trust says while the payment is helpful, demand for food aid will likely remain steady through the year.
The £165 payment in July 2025 isn’t a game-changer, but for many, it’s a temporary breather. It shows the government is still trying to reach those who are most vulnerable.
People should check eligibility, be cautious of scams, and keep an eye on their bank accounts. Whether this is the last of such support or just a stopgap remains to be seen. But for now, a little help can go a long way.
FAQs
Who will get the £165 payment?
Those receiving certain benefits from Jan 26 to Feb 25, 2025.
When will the £165 be paid?
Payments will start rolling out in July 2025.
How will the payment appear?
As ‘DWP COL’ or ‘HMRC COL’ in your bank account.
Can the government ask for bank details?
No, never via phone or message. Beware of scams.
Why is the amount less this time?
The government is cutting back due to fiscal concerns.
