After a particularly challenging winter and with inflation continuing to put pressure on household budgets across the United Kingdom, the government has announced a new round of cost of living support payments.
Starting in April 2025, eligible recipients will receive a one-off payment of £165 aimed at helping vulnerable households manage essential costs as the economy continues its tentative recovery.
This latest measure comes as part of the government’s ongoing response to economic pressures facing millions of British families.
While smaller than some previous support packages, the targeted payment represents a recognition that many households continue to struggle despite official inflation figures showing modest improvement.
Who Qualifies for the £165 Payment?
The Department for Work and Pensions (DWP) has outlined specific eligibility criteria for the upcoming payment. Those who may qualify include:
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Individuals receiving Universal Credit
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Recipients of Pension Credit
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Those on Income-based Jobseeker’s Allowance (JSA)
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People receiving Income-related Employment and Support Allowance (ESA)
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Recipients of Income Support
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Working Tax Credit recipients
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Child Tax Credit recipients
Margaret Willoughby, a benefits adviser at Citizens Advice in Birmingham, explains: “The new payment is using similar eligibility criteria to previous cost of living payments, though the government has slightly tightened some requirements.
Claimants will need to have been entitled to receive at least one qualifying benefit payment during the qualifying period, which runs from 26 January to 25 February 2025.”
The DWP estimates that approximately 8 million households across the UK will qualify for this latest round of support, though this represents a slight decrease from previous payment schemes.
Payment Timeline and Logistics
According to the official announcement, the £165 payments will begin rolling out from 8 April 2025, with most eligible recipients expected to receive their payment within two weeks of the start date.
As with previous support schemes, the government has stressed that payments will be made automatically – there is no need to apply.
“The payment will appear in bank accounts with the reference ‘DWP COL’ followed by the recipient’s National Insurance number,” notes Thomas Hargreaves, a spokesperson for the DWP.
“We urge people to be vigilant about scams, as we know from experience that fraudsters often target vulnerable individuals during these payment periods.”
For those receiving Tax Credits who don’t receive DWP benefits, payments will be handled by HMRC slightly later, with these payments scheduled to begin from 16 April 2025. These will appear with the reference ‘HMRC COL’ followed by the recipient’s National Insurance number.
The Context Behind the Payment
The new £165 payment comes at a time when many households continue to feel financial strain despite headline inflation figures showing improvement.
Recent data from the Office for National Statistics showed that while overall inflation had eased to 2.9%, the cost of essential goods and services remained stubbornly high.
Food inflation, while down from its peak of 19.2% in March 2023, still stood at 4.7% in January 2025, meaning grocery bills continue to put pressure on household budgets.
Similarly, despite the energy price cap reductions announced by Ofgem, average annual energy bills remain significantly higher than pre-crisis levels.
Dr. Eleanor Jameson, economist at the Centre for Economic Policy Research, offers context: “While the macroeconomic indicators suggest improvement, the lived experience for many households remains extremely challenging.
The cumulative effect of sustained high prices over the past three years has depleted financial buffers for many families, leaving them vulnerable even as headline inflation moderates.”
This perspective is echoed by community support workers across the country. Sarah Thompson, who runs a food bank in Newcastle, reports: “We’re still seeing record numbers of people needing support, including many working families who simply can’t stretch their wages to cover basics. The reality on the ground doesn’t match the improving economic picture painted in Westminster.”
How Does This Compare to Previous Support?
The £165 payment represents a scaled-back approach compared to earlier cost of living support measures. During the height of the energy crisis in 2022-23, eligible households received payments totaling up to £1,350 across multiple installments.
Robert Chote, former head of the Office for Budget Responsibility and now an independent economic commentator, provides perspective: “The reduction in the amount reflects both fiscal constraints and the government’s assessment that while pressures remain significant, they’re not as acute as during the energy price shock period.
There’s a delicate balance between providing necessary support and managing public finances responsibly.”
The new payment also comes with tighter eligibility criteria. Unlike earlier schemes, households will need to have received a qualifying benefit for the entire qualifying period, rather than just being in receipt of benefits at a specific point in time.
What Difference Will £165 Make?
For many struggling households, the question remains whether £165 will make a meaningful difference to their financial situation. Opinions among recipients and support organizations are mixed.
James Bartley, a 58-year-old Pension Credit recipient from Cardiff, shares his view: “Every bit helps, of course it does. But £165 doesn’t go very far when you look at how much the basics have gone up.
My energy bill alone is still nearly £90 a month even in summer, and that’s being careful. It feels more like a gesture than genuine support.”
Meanwhile, Karen Wilson, a single mother of two from Manchester who receives Universal Credit, offers a different perspective: “For me, that £165 means I can replace my children’s school shoes without worrying about cutting back on groceries. It’s not going to solve all our problems, but it provides a bit of breathing space.”
Financial charities have broadly welcomed the payment while emphasizing that more comprehensive support is needed. Michael Ashford, policy director at the Money Advice Trust, states: “This payment will provide some temporary relief to millions of households, but we need to recognize it’s a sticking plaster rather than a solution to the underlying issues of inadequate income and high essential costs facing many Britons.”
Criticisms and Alternative Proposals
The announcement has not been without its critics. Opposition parties have characterized the payment as insufficient given the scale of financial hardship many continue to face.
Shadow Work and Pensions Secretary Lisa Moore argued: “This payment amounts to just £3.17 per week over a year – hardly enough to make a dent in the increased costs households are facing. The government is tinkering around the edges rather than addressing the fundamental issues in our economy.”
Some anti-poverty campaigners have advocated for a different approach altogether. Dr. Helen Barnard, director of policy at the Joseph Rowntree Foundation, suggests: “One-off payments provide temporary relief but do little to address the chronic financial insecurity facing millions.
A more effective approach would be to strengthen the social security system permanently, ensuring benefits properly reflect the real costs people face.”
Others have questioned the universal nature of the payment within eligibility categories, suggesting a more targeted approach might deliver greater support to those most in need.
Professor Jonathan Richards of the Social Policy Research Institute notes: “There’s a case to be made for variable payment amounts based on household composition and circumstances, rather than a flat rate for all eligible recipients.”
Navigating the Application Process
While the DWP has emphasized that payments will be made automatically to eligible recipients, some individuals may fall through the cracks. Those who believe they qualify but don’t receive a payment by the end of April 2025 are advised to contact the relevant department:
- For DWP benefits: Call the general enquiries helpline on 0800 169 0310
- For HMRC Tax Credits: Call the Tax Credits helpline on 0345 300 3900
Melanie Fraser, a benefits rights advisor, offers this guidance: “Keep records of your benefit entitlements during the qualifying period as evidence if you need to query a missing payment.
And remember, legitimate communications from DWP or HMRC will never ask for your bank details – if someone contacts you claiming to be processing your cost of living payment and asks for this information, it’s a scam.”
Looking Beyond April 2025
The government has remained non-committal about whether further support payments will be forthcoming later in 2025. The Treasury statement accompanying the announcement noted that “future support measures will be kept under review in line with economic conditions and fiscal constraints.”
Economic forecasters suggest that while inflation is expected to continue moderating throughout 2025, the lagging effects of the cost of living crisis will continue to impact household finances for some time to come.
The Institute for Fiscal Studies projects that real household disposable incomes will not return to pre-pandemic levels until at least mid-2026 for many lower-income families.
Community organizations are already preparing for continued need beyond this payment. Foodbanks, debt advice services, and community support networks are developing longer-term strategies based on the expectation that financial pressures will remain significant for vulnerable households.
William Davies, director of the Trussell Trust in Wales, concludes: “While we welcome this payment, our planning assumes continued high demand for emergency food support throughout 2025 and beyond.
The economic wounds from the past few years run deep, and recovery for many households will be measured in years, not months.”
As April 2025 approaches, eligible households will welcome the £165 support, modest though it may be in the face of ongoing financial challenges.
For many, it represents not just practical help but acknowledgment that despite improving economic indicators, the struggle to make ends meet remains very real for millions across Britain.