The rising cost of essentials across the UK continues to impact millions of households. To offer some relief, the UK government is issuing a £450 Cost of Living Payment in August 2025. This initiative is part of a wider strategy to support low-income individuals, pensioners, and families struggling with inflation and increased utility bills.
If you’re wondering whether you qualify for this new support and when the payments will arrive, this guide covers all essential details. From eligibility rules to payout timelines, here’s everything UK residents need to know.
What is the £450 Cost of Living Payment?
The £450 Cost of Living Payment is a one-time, tax-free payment aimed at helping eligible UK households manage their rising expenses in 2025. The payment will be disbursed by the Department for Work and Pensions (DWP) and HM Revenue and Customs (HMRC) depending on your type of benefit or tax credit.
It comes in response to ongoing demands for increased financial help due to inflation, energy costs, and food price hikes. This support is in addition to any existing benefits you may already receive, such as Universal Credit, Pension Credit, or Tax Credits.
Who Will Receive the £450 Payment?
Not all UK residents will qualify for the £450. The government has set clear eligibility criteria to target households most in need. The payment is expected to go to:
- Those on means-tested benefits
- Low-income pensioners
- Certain recipients of tax credits
This includes both individuals and families receiving specific government support, as detailed below.
Qualifying Benefits for the August 2025 Payment
To be eligible, you must have been receiving at least one of the following means-tested benefits during the qualifying period (or have had a successful backdated claim):
- Universal Credit
- Pension Credit
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Income Support
- Working Tax Credit
- Child Tax Credit
Note: Those receiving only contribution-based JSA or ESA will not be eligible unless they also receive one of the qualifying benefits listed above.
Payment for Pensioners
Pensioners receiving Pension Credit (either Guarantee Credit or Savings Credit) are automatically eligible. Even if your application for Pension Credit is submitted after the qualifying window closes, it may still be considered if it is backdated correctly.
The government urges eligible pensioners who have not yet applied for Pension Credit to do so immediately, as many still miss out due to lack of awareness.
Who Will Not Be Eligible?
You will not receive the £450 payment if:
- You only receive contribution-based benefits without a qualifying top-up
- You were not receiving any qualifying benefit during the eligibility period
- Your benefit payments were suspended or sanctioned during that period
Additionally, those living in care homes who don’t qualify for means-tested support may not be eligible.
Qualifying Period Dates
While the DWP has not confirmed exact qualifying dates, it is expected that you must have been eligible for a qualifying benefit between 1 June 2025 and 30 June 2025. Any new claim approved and backdated to this period may also be eligible.
Keep in mind: You don’t need to apply for this payment. If you’re eligible, it will be paid automatically to your bank or building society account.
When Will the £450 Be Paid?
According to government sources and early reports, payments are expected to begin from 19 August 2025 and continue until 2 September 2025, depending on your benefit provider.
- DWP Payments (e.g. Universal Credit, ESA, Pension Credit): Starting from 19 August 2025
- HMRC Payments (for Tax Credit claimants only): May begin slightly later, likely from 23 August 2025
You may not receive the payment on the same day as others. It depends on your national insurance number and payment cycles.
Will the Payment Be Taxed?
No, the £450 payment is completely tax-free, does not count towards your benefit cap, and will not affect your existing benefits or entitlements.
This means you can receive it without any fear of reductions in your ongoing support or having to declare it as income for benefit calculations.
Payment Method
The payment will be made directly to your bank account, using the same details the DWP or HMRC holds for your regular benefit payments.
You’ll see the payment with a reference such as:
“DWP COLP” or “HMRC COL” depending on the department disbursing the amount.
There is no need to call DWP or HMRC to claim it—if you’re eligible, you will receive it automatically.
What If You Don’t Receive the Payment?
If you’re eligible but don’t receive the payment by mid-September 2025, you should:
- Check your bank account and payment reference
- Confirm you were receiving a qualifying benefit during the eligibility window
- Wait for the official “missing payment” online form to be released on the DWP website
- Only contact DWP after the final payment window has passed
In previous years, delays were often due to incorrect banking details or sanctions, so ensure your benefit account is up to date.
Additional Support Available
If you’re still struggling after receiving the £450 payment, other forms of assistance may be available:
- Local Council Discretionary Funds
- Warm Home Discount Scheme (winter 2025–26)
- Free school meals and transport for eligible households
- Energy Bill Support Scheme (if renewed again)
- Food banks and community pantries
Many UK councils are also providing Household Support Fund grants, so check your local council’s website regularly for updated schemes.
Common Questions
Is this payment only for people on Universal Credit?
No. The payment is for a range of means-tested benefits, including Pension Credit, Tax Credits, and income-based ESA or JSA.
Will couples both receive £450?
No. It’s one payment per eligible household, not per individual. So, couples who share benefits will get a single £450 payment.
Is this different from the Winter Fuel Payment?
Yes. The Winter Fuel Payment is a separate annual scheme for pensioners during colder months. The £450 payment is a Cost of Living Payment aimed at general support.
What if I just lost my job?
If you apply for a qualifying benefit now and your claim is backdated to the eligibility window, you might still qualify. Contact your Jobcentre Plus or local support services for guidance.
Final Words
The £450 Cost of Living Payment in August 2025 offers crucial support for millions of households dealing with high inflation and increasing day-to-day costs. If you’re receiving a qualifying benefit, there’s nothing you need to do—it will be paid automatically. But if you believe you should qualify and haven’t received it by September, take action quickly.
As always, staying informed and checking your benefit status is key. With more financial challenges likely ahead, this support could make a real difference for struggling families across the UK.
