The UK Government has confirmed a £450 Cost of Living Payment to be made in August 2025 for eligible households struggling with rising prices. The payment will help millions across the country cope with higher energy bills, food costs, and other essential expenses. In this guide, we break down exactly who qualifies, how the payment will be made, and when you can expect to receive it.
What Is The £450 Cost Of Living Payment?
The £450 Cost of Living Payment is a one-off support payment designed to help vulnerable and low-income households. It is part of the government’s ongoing measures to tackle the financial pressure caused by high inflation and increasing living costs. Unlike loans or tax credits, this payment is non-repayable, meaning you do not need to return it.
This payment will be issued by the Department for Work and Pensions (DWP), HM Revenue and Customs (HMRC), and the Ministry of Defence, depending on your type of benefit claim. It is separate from other ongoing benefit payments and will be paid directly into your bank account.
Who Qualifies For The £450 Payment?
Eligibility for the £450 Cost of Living Payment in August 2025 is based on whether you receive certain means-tested benefits. You must have been entitled to one of the qualifying benefits during the assessment period announced by the government. The key qualifying benefits include:
- Universal Credit
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Income Support
- Pension Credit
- Child Tax Credit
- Working Tax Credit
If you are receiving only contributory-based or new-style JSA/ESA, you will not qualify unless you also receive a means-tested benefit.
Pensioners And The £450 Payment
Many pensioners will be eligible for the £450 payment if they are claiming Pension Credit. Pension Credit is often underclaimed, so older people are encouraged to check their entitlement as even a small award could secure them access to this payment. Pension Credit claims can be backdated up to three months, meaning you might still qualify even if you apply after the assessment period.
How The Payment Will Be Made
The £450 payment will be sent automatically to those who qualify—there is no need to apply. The money will be deposited into the same bank account where you normally receive your benefit payments. The reference will usually include your National Insurance number and a short code such as “COL” or “Cost of Living.”
Payments from the DWP and HMRC will not arrive on the same day if you are eligible for both, but you will still receive the full amount.
Payment Dates In August 2025
The official payment window for the £450 Cost of Living Payment is expected to be between 12 August 2025 and 26 August 2025. Your exact payment date will depend on the benefit you receive and the department making the payment.
- DWP claimants (e.g., Universal Credit, Pension Credit) will likely receive payments earlier in the window.
- HMRC claimants (e.g., Tax Credits only) may receive theirs towards the end of August.
If you do not see the payment by the end of the window, you should contact the relevant department, but only after the official deadline.
Impact On Other Benefits
The £450 payment will not affect your entitlement to other benefits, tax credits, or the amount you receive. It is not taxable and will not be considered as income when calculating your benefit eligibility. This makes it an important additional boost during a period of high living costs.
Assessment Period Rules
To qualify, you must have been entitled to a payment (or later found to be entitled) of one of the eligible benefits for a day during the assessment period, which will be set by the government. For example, if you qualified for Universal Credit for at least one day in the set period, you should receive the payment automatically.
If your benefits were stopped or reduced to £0 during the assessment period due to sanctions or deductions, you may not qualify. However, if the reduction was due to advances or repayments, you might still be eligible.
What To Do If You Don’t Receive The Payment
If you believe you are eligible but do not receive the £450 payment by the end of August 2025, the first step is to check your bank account carefully, as payments may appear under different references. If it is not there, contact the department responsible for your benefit:
- DWP: For Universal Credit, Pension Credit, ESA, JSA, or Income Support.
- HMRC: For Child Tax Credit or Working Tax Credit.
Have your National Insurance number, bank details, and benefit claim information ready when making the call.
Cost Of Living Context In 2025
By August 2025, inflation is expected to remain above the Bank of England’s 2% target, with food, rent, and utility prices continuing to put pressure on households. The government’s one-off payments, like the £450 support, are part of a wider package that also includes the Winter Fuel Payment, Cold Weather Payment, and Warm Home Discount for eligible households.
While these payments help, many charities argue they are short-term solutions and call for more structural changes to benefit rates and housing support.
Other Support Available
If the £450 payment is not enough to cover your needs, there are other forms of help you can explore:
- Council Tax Support: Local councils offer reductions for low-income households.
- Warm Home Discount: A £150 discount on electricity bills for eligible households.
- Local Welfare Assistance: Emergency grants from your local council for food or essential household items.
- Food Banks and Community Support Schemes: Operated by charities like the Trussell Trust.
These options can be combined with the Cost of Living Payment to provide more financial relief.
Avoiding Scams
The DWP and HMRC will never ask for personal details such as passwords or bank PINs over the phone, text, or email in relation to the £450 payment. Any message asking you to “apply” for this payment is likely a scam. The payment will be sent automatically if you qualify.
Final Thoughts
The £450 Cost of Living Payment in August 2025 will provide much-needed relief for millions of UK households. With automatic payments, no tax liability, and no impact on other benefits, it is one of the most straightforward forms of support available. If you think you might be eligible, ensure your benefit claims are up to date so you do not miss out when the payment window opens.
