To support low-income and vulnerable households, the UK government is launching a £250 Cost of Living Credit starting July 2025. This initiative forms part of a broader effort to reduce the burden of inflation and provide direct financial relief to struggling families. If you’re wondering whether you’re eligible or when you might receive this payment, this guide will walk you through all the important details.
What Is the UK £250 Cost of Living Credit?
With inflation pushing up the prices of essentials like food, rent, and energy, millions of UK residents are facing serious financial stress. In response, the government has introduced a one-off, tax-free payment of £250 to help cushion the impact on the most affected groups.
This £250 support credit is separate from other benefits like Universal Credit or Pension Credit and does not require a formal application. Eligible recipients will automatically receive the payment in their bank accounts during the late July 2025 disbursement window.
Purpose of the £250 Cost of Living Credit
The primary aim of this payment is to:
- Ease economic stress for those with limited income.
- Help cover essential living costs such as utilities, food, and rent.
- Offer timely financial relief without requiring a lengthy application process.
This initiative is one of several government relief programs being rolled out to combat the ongoing cost-of-living crisis in the UK.
Key Payment Information
| Particular | Details |
|---|---|
| Payment Amount | £250 (one-time) |
| Start Date | Late July 2025 |
| Disbursement Timeline | Between July 20 and July 30, 2025 |
| Qualifying Period | Must have received qualifying benefits from Jan 15 to Feb 28, 2025 |
| Eligible Benefits | Universal Credit, JSA (income-based), ESA (income-related), Income Support, Pension Credit, Working/Child Tax Credit, PIP, DLA, Attendance Allowance |
| Target Groups | Low-income households, disabled individuals, pensioners |
| Payment Reference | Will appear as “DWP COL” or “HMRC COLP” |
| Other Support Available | £450 Energy Support, Council Tax Reductions, Household Support Fund |
Eligibility Criteria
To qualify for the £250 Cost of Living Credit, individuals must have received at least one of the following benefits during the qualifying window:
- Universal Credit
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Income Support
- Pension Credit
- Working Tax Credit
- Child Tax Credit
- Disability benefits such as PIP, DLA, or Attendance Allowance
Note: Contribution-based ESA or Carer’s Allowance alone do not qualify you for this payment.
How and When Will the Payment Be Made?
No application is needed. Payments will be made automatically to the eligible person’s bank account.
- DWP recipients (e.g., Universal Credit, ESA, JSA) will be paid first, starting from July 20, 2025.
- HMRC recipients (e.g., Working or Child Tax Credit) will be paid later, typically by July 30, 2025.
- Always check your bank statement for the payment reference marked as “DWP COL July” or “HMRC COL July”.
Common Reasons for Missing a Payment
Here’s why some individuals might not receive the payment:
- Bank details are outdated or incorrect
- You did not receive benefits during the qualifying period
- You’re receiving non-qualifying benefits only
- In shared claims, only one payment per household is issued
- You opted out of notifications and missed updates
Conclusion
The UK £250 Cost of Living Credit in July 2025 offers critical relief to thousands of individuals and families grappling with rising costs. With automatic payments and broad eligibility, this initiative ensures that financial help reaches those who need it most—without any red tape. As long as you’re receiving the qualifying benefits during the set timeframe, you can expect the support to arrive directly in your bank account.
Frequently Asked Questions
1. Who is eligible for the £250 Cost of Living Payment?
Anyone who received qualifying benefits such as Universal Credit, Pension Credit, or income-based JSA/ESA between January 15 and February 28, 2025, may be eligible.
2. Do I need to apply to receive the payment?
No, you don’t need to apply. If you qualify, the payment will be sent automatically to your bank account.
3. When will I receive the payment?
The payment will be deposited between July 20 and July 30, 2025, depending on the department responsible for your benefits (DWP or HMRC).
4. What should I do if I don’t receive the payment?
Check your bank reference for “DWP COL” or “HMRC COLP”, verify eligibility on Gov.uk, and if needed, contact DWP to resolve the issue.
5. Can both partners in a joint claim receive £250 each?
No. For joint claims, such as for Universal Credit, only one £250 payment is made per household, not per individual.