As inflation and living expenses remain high, the UK government has reintroduced a £165 Cost of Living Payment for eligible low-income households in July 2025.
This one-off financial aid aims to ease the burden of soaring energy bills, food prices, and everyday expenses.
Let’s explore who qualifies, when payments will arrive, and how to ensure you receive your support safely.
Why This £165 Support Payment Matters
Despite a slight dip in inflation in early 2025, millions of UK households continue to face severe financial strain.
Rising energy bills, reduced savings, and stagnant income levels have led the government to introduce this £165 relief payment as part of its ongoing support efforts.
According to the latest data, approximately 8 million households are expected to benefit.
Eligibility Criteria
To receive the £165 payment, individuals must have received payments from one or more qualifying benefits between 26 January 2025 and 25 February 2026.
Qualifying Benefits:
- Universal Credit
- Pension Credit
- Income-based Jobseeker’s Allowance (JSA)
- Income-based Employment and Support Allowance (ESA)
- Income Support
- Working Tax Credit
- Child Tax Credit
Note: The payment will not be issued to those receiving only contribution-based benefits.
Payment Schedule & How It Will Appear
| Type of Beneficiary | Payment Label | Expected Timeframe |
|---|---|---|
| DWP benefit recipients | DWP COL | From July 2025 |
| HMRC (Tax Credits) only recipients | HMRC COL | From July 2025 |
Most recipients will see the payment in their bank account within 2 weeks, starting mid-July.
Fraud Warning: Stay Safe
The DWP and HMRC have issued strong warnings against scam messages or calls. The government will not ask for your bank details via phone, email, or text.
If someone contacts you requesting personal or banking information, report it immediately and consult only official government sources for guidance.
Why Is This Payment Lower Than Previous Support?
During the 2022-23 energy crisis, families received up to £1,350. However, the current payment is £165 due to:
- Reduced inflation (but still high living costs)
- Government fiscal tightening
- Shift to more targeted, need-based aid
Eligibility is now based on having received qualifying benefits for an entire month (26 Jan–25 Feb 2026), not just on a single date.
Is £165 Enough to Help?
Public sentiment varies:
- Karen Wilson, a single mother from Manchester, said the amount will help her afford back-to-school expenses.
- James Bartle, a retiree from Cardiff, finds the payment insufficient given his high energy bills.
Experts like Michael Ashford from the Money Advice Trust stress that while this is short-term relief, long-term solutions are urgently needed.
What’s Next?
The Treasury has not committed to further payments. Future decisions will depend on:
- Economic conditions
- Inflation trends
- Government budget capacity
Financial organizations estimate that low-income households may only stabilize by mid-2026, suggesting more support may still be required.
The £165 Cost of Living Payment in July 2025 is a modest but crucial relief for millions of struggling households across the UK.
While it may not solve all financial challenges, it reflects the government’s recognition of ongoing hardship. Beneficiaries must remain vigilant against fraud and ensure their benefit eligibility was active during the required window.
As the economic recovery continues, all eyes remain on what further support may be introduced in the months ahead.
FAQs
What is the £165 Cost of Living Payment?
It’s a one-time financial aid provided by the UK government in July 2025 to support low-income families battling inflation.
Who is eligible for the £165 payment?
Anyone receiving qualifying benefits like Universal Credit, Pension Credit, or Tax Credits between 26 January and 25 February 2026.
When will the payment be made?
Payments will be made starting from mid-July 2025. DWP recipients will see “DWP COL” and HMRC claimants will see “HMRC COL” in their bank statements.