The UK government has announced a £450 Cost of Living Payment set to be distributed in July 2025, offering financial relief to households affected by persistent inflation and rising living costs.
For many receiving benefits such as Universal Credit or Pension Credit, this one-off payment could provide significant help in covering ongoing expenses.
This guide details all you need to know about the £450 Cost of Living Payment—from eligibility criteria to payment dates, as well as how to ensure the payment process goes smoothly.
What Is the £450 Cost of Living Payment?
The £450 Cost of Living Payment is a one-time government grant aimed at providing financial assistance to individuals and families struggling with high living expenses.
It’s designed as part of a broader response to economic challenges similar to earlier relief programs during times of crisis, such as the pandemic or energy price surges.
The Department for Work and Pensions (DWP) will automatically deposit this payment into the bank accounts of those eligible. No application is required, making the process straightforward.
The payment will be made directly to the bank accounts linked to income-based benefits starting from July 19, 2025, with payments continuing through the end of the month.
Payment Overview
| Detail | Information |
|---|---|
| Payment Amount | £450 |
| Disbursement Start | From July 19, 2025 |
| Eligibility Criteria | Claiming income-based benefits within the set period |
| Application Needed | No, payment will be automatic |
| How Paid | Direct deposit to bank account linked to benefits |
| Reference Code | “DWP COLP” followed by National Insurance number |
| Final Payment Date | By July 31, 2025 |
| Official Source | gov.uk/dwp |
Why Was This Payment Introduced?
Although inflation has slightly eased, the cost of everyday essentials remains high, particularly for food, fuel, rent, and electricity. As government support programs for energy bills taper off, households continue to feel the financial strain.
This £450 payment is a targeted relief measure to address the financial pressure on low-income households. By providing direct cash support during a particularly challenging month, the government aims to help families manage immediate expenses and avoid falling behind on essential bills or relying on high-interest loans.
Eligibility Criteria
To qualify for the £450 Cost of Living Payment, individuals must have been entitled to certain income-related benefits during the specified qualifying period. While the exact qualifying week has not yet been confirmed, the eligible benefits include:
- Universal Credit (UC)
- Pension Credit
- Income Support
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
Additionally, individuals receiving Working Tax Credit or Child Tax Credit may qualify, provided they meet other specific requirements. However, those on New Style ESA or JSA (not income-based) are not eligible.
Note: Eligibility is determined automatically based on benefits status during the qualifying week, so there is no need for claimants to apply.
Payment Schedule
The £450 payments will begin on July 19, 2025, and continue through July 31, 2025. Eligible recipients will receive the payment directly into the bank account linked to their benefits, with no advance notice.
The payment will appear as “DWP COLP” followed by the recipient’s National Insurance number in the bank statement. If the payment hasn’t been received by the end of July 2025, it’s advisable to reach out to the DWP for assistance.
What to Do Before the Payment Arrives
Even though no application is needed, it’s important to ensure your benefit records are up to date to avoid any delays in receiving the payment. Here are some steps you can take:
- Verify your bank details with the DWP
- Keep your contact information current
- Review your benefits eligibility if your circumstances have changed
- Keep an eye on your July bank statements for the “DWP COLP” payment reference
Taking these steps will help ensure that you receive the payment without any issues.
Objectives of the Payment
The £450 Cost of Living Payment aims to mitigate the ongoing economic hardships experienced by low-income households due to:
- High food inflation despite a slowdown in overall inflation
- Soaring energy bills despite energy price caps
- Increasing housing costs, especially rent in urban areas
- Rising transport costs, including rail and bus fares
- Global economic instability, affecting supply chains and domestic prices
These combined challenges have left many working families struggling to keep up. The one-off payment is intended to provide some relief, helping them cope with immediate financial pressures.
How Will the Payment Be Tracked?
Since no advance application or letter will be sent, the bank transaction reference is the main way to track the payment. Recipients should look for:
- “DWP COLP” followed by their National Insurance number
If the payment is not received by July 31, 2025, eligible individuals should contact the DWP directly using their usual method, whether through the online portal, helpline, or local Jobcentre.
The £450 Cost of Living Payment in July 2025 is a vital measure to support households struggling with ongoing inflation and rising living costs.
With automatic disbursements, eligible recipients can expect to receive the payment directly in their bank accounts, offering timely relief.
Ensuring that your records with the DWP are accurate and up to date will help guarantee that you don’t miss out on this much-needed assistance.
FAQs
Who qualifies for the £450 Cost of Living Payment?
To qualify, recipients must be receiving income-related benefits like Universal Credit, Pension Credit, or Income Support during the qualifying period.
When will the £450 payment be made?
Payments will be made between July 19 and July 31, 2025, directly into the bank accounts linked to benefits.
Do I need to apply for the payment?
No, the payment is automatic and will be deposited into your account based on your benefits status.