Payment dates for benefits and pensions in December 2025 along with cost of living assistance

As 2025 comes to a close, many families in the UK are bracing for higher bills coupled with colder weather, which is set to increase household expenses just before Christmas. Millions continue to struggle with the cost of living as prices climb faster than incomes. Despite inflation stabilizing to pre-pandemic levels, goods remain expensive while wages show little growth. High household bills are forcing many into debt just to cover essential needs.

Research from the Trussell Trust highlights that around 14 million adults are skipping meals because they cannot afford food. Energy arrears have surged over the past five years, reaching 4.4bn by the end of June. The Joseph Rowntree Foundation warns that low-income families could face the steepest decline in living standards ever recorded by the 2029 election.

Households are encouraged to claim any financial support they are eligible for. Currently, approximately 24 million people receive some form of DWP-administered benefits, including the state pension, which accounts for roughly one in three UK residents. From next April, the state pension is set to rise by 4.7% in line with earnings growth.

Policy in Practice reports that 24bn in benefits remain unclaimed annually. A benefits calculator is available online to help households determine their entitlements. Anyone struggling with cost of living or DWP issues can reach out via email for guidance.

Benefit and Pension Payments in December

Most benefit payments will be processed as usual this month, though bank holidays will affect some dates:

• Payments scheduled for Thursday 25 December (Christmas Day) and Friday 26 December (Boxing Day) will be issued on Wednesday 24 December (Christmas Eve).
• Payments due on Thursday 1 January (New Years Day) will be paid on Wednesday 31 December (New Years Eve).

The DWP plans to complete the transition of all legacy benefits to Universal Credit by January 2026. Notices about this move should already have been sent to recipients of tax credits, income support, jobseekers allowance, and housing benefit.

The basic state pension is paid every four weeks directly into bank accounts, with the payment date linked to the last two digits of the recipients National Insurance number. Bank holiday adjustments apply similarly to pensions.

Upcoming Benefit Changes

In April 2026, Universal Credit claimants will see a 6.2% increase in the standard allowance. For individuals over 25, the weekly rate will rise from 92 to 98, and for couples over 25, from 145 to 154. Other benefits, including PIP, DLA, Attendance Allowance, Carers Allowance, and ESA, are expected to increase by 3.8% in line with September inflation.

However, the health-related element of Universal Credit for new claimants will be reduced from 105 to 50 per month, with existing claimants frozen until 2029. The state pension will increase by 4.8%, reaching 241.05 weekly.

Additional Financial Support

The government offers budgeting advance loans for Universal Credit recipients, repayable over two years, with interest-free deductions. Discretionary Housing Payments (DHP) are available via local councils to help cover rent shortfalls or moving costs. The Household Support Fund (HSF) provides assistance with essentials, utility bills, and one-off cash payments up to 300, running until March 2026, after which it will transition into a Crisis and Resilience Fund.

Charitable grants may also be accessible for those in financial hardship. Energy suppliers, including British Gas, Scottish Power, EDF, E.ON, and Octopus, offer support for households struggling to pay bills, including free devices in some cases. Social tariffs exist for broadband and water bills, but the level of support varies by provider. Council tax reductions of up to 100% may be available for eligible households.

Childcare and Energy Updates

Since 1 September 2025, working parents can access 30 hours of free childcare for children under four. Tax-free childcare is also available, offering 20p back for every 80p spent, up to 500 per year.

Ofgems energy price cap rose 2% in October 2025 to 1,755 and will increase slightly to 1,758 for JanuaryMarch 2026. Households may consider fixed-rate energy deals that offer lower rates than the cap. The DWP has not announced any continuation of cost of living payments beyond 2024.

Mental Health and Support Services

For mental health support, Samaritans are available 24/7 at 116 123, via email, or at local branches. Mind provides a support line at 0300 102 1234, plus information and welfare benefits lines. Scope offers online forums for disabled individuals, and the NHS provides an online mental health triage service.

Author: Sophia Brooks