Numi Kent
The UK government has announced a £250 Cost of Living Credit launching in July 2025, designed to offer one-time financial relief to low-income individuals, pensioners, and people with disabilities.
As inflation continues to burden household budgets, this tax-free support aims to help vulnerable citizens cope with the rising costs of essentials like food, energy, and rent.
If you are currently receiving benefits like Universal Credit or Pension Credit, you may automatically qualify. Read on for complete details on eligibility, payment timelines, and how to make sure you don’t miss out.
What Is the UK £250 Cost of Living Payment?
This payment is a government-backed support scheme, separate from existing benefits. It’s designed to ease the financial burden caused by ongoing inflation and high living costs.
Eligible recipients will receive £250 as a one-time direct deposit, with no need to apply.
The Department for Work and Pensions (DWP) and HMRC will manage the disbursements depending on the type of benefit you receive.
Key Highlights of the £250 Cost of Living Credit
| Particular | Details |
|---|---|
| Payment Amount | £250 one-time, tax-free |
| Payment Timeline | Begins July 20, 2025; all payments completed by July 30, 2025 |
| Qualifying Period | Must have received benefits between Jan 15 – Feb 28, 2025 |
| Eligible Benefits | Universal Credit, ESA, JSA, Income Support, Pension Credit, Tax Credits, PIP, DLA |
| Recipients | Low-income individuals, pensioners, disabled persons |
| Payment Reference | “DWP COL July” or “HMRC COL July” on your bank statement |
| Application Process | No application needed – automatic payment to eligible recipients |
Who Is Eligible for the £250 Cost of Living Payment?
You must have received at least one of the following qualifying benefits during the specified period to be eligible:
- Universal Credit
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Income Support
- Pension Credit
- Working Tax Credit (HMRC)
- Child Tax Credit (HMRC)
- Disability benefits, including:
- Personal Independence Payment (PIP)
- Disability Living Allowance (DLA)
- Attendance Allowance
Note: Benefits like contribution-based ESA and Carer’s Allowance alone do not make you eligible.
Only one £250 payment per household is allowed, even if both partners are receiving qualifying benefits.
When Will You Receive the Payment?
The government has announced a staggered rollout of payments to different groups in late July 2025:
- DWP benefit recipients (e.g., UC, ESA, JSA) will receive payments first, beginning July 20.
- HMRC benefit recipients (e.g., Tax Credits) will receive their payments shortly after, typically by July 30.
Be sure to check your bank statement for the transaction labeled as “DWP COL July” or “HMRC COL July“.
What If You Don’t Receive the Payment?
If you believe you’re eligible but don’t see the payment by early August, follow these steps:
- Check bank account for the correct payment reference.
- Log in to Gov.uk and verify your benefit status.
- Call DWP or HMRC to raise a concern.
- Submit a formal complaint, if necessary.
- Keep a record of your complaint reference number.
Make sure your bank details are updated, and that your benefits were active during the qualifying period.
The £250 Cost of Living Credit set to roll out in July 2025 is part of the UK’s effort to protect vulnerable households from financial pressure.
With no application needed, this payment will provide much-needed relief for millions. If you’re on qualifying benefits, mark your calendar and monitor your account for the upcoming automatic deposit.
FAQs
Is the £250 cost of living payment taxable?
No, the payment is tax-free and does not affect your other benefits or tax entitlements.
Do I need to apply for the £250 payment?
No application is required. Eligible recipients will receive the payment automatically via their benefit payment account.
Will both partners receive £250 in a joint Universal Credit claim?
No. Only one payment per household will be issued, regardless of how many people are listed on the claim.