As 2025 unfolds, millions of households continue to seek ways to manage rising expenses. Record highs in household bills, groceries, and housing costs have left many grappling with the ongoing cost of living crisis. Here’s an overview of the key financial updates, benefits information, and resources available to support households this year.
Economic Context
The UK’s economic picture is mixed. Inflation dipped slightly to 2.5% in December 2024, offering a glimmer of hope, while the economy experienced modest growth. However, reports suggest further cuts to sickness and disability benefits, with £3 billion in savings already planned.
Additionally, poverty forecasts by the Joseph Rowntree Foundation predict a rise of 100,000 children and 300,000 adults living in poverty by October 2029 without urgent government intervention.
Payment Dates
February sees no bank holidays, so benefits and pensions will be paid as usual. Payments include:
- Universal Credit
- State Pension
- Pension Credit
- Child Benefit
- Disability Living Allowance (DLA)
- Personal Independence Payment (PIP)
- Attendance Allowance
- Carer’s Allowance
- Employment Support Allowance (ESA)
- Income Support
- Jobseeker’s Allowance (JSA)
The migration of all legacy benefits to Universal Credit will be completed by January 2026, with Employment Support Allowance and Housing Benefit transitioning by December 2025.
Household Support Fund
The Household Support Fund (HSF) provides assistance through local councils to vulnerable households. Councils may offer:
- Cash grants
- Supermarket vouchers
- Energy bill support
The Labour government has extended the HSF until March 2025. Visit your local council’s website to check available support.
Financial Assistance
Universal Credit claimants facing emergencies can apply for interest-free budgeting advance loans.
| Claimant Type | Maximum Loan |
|---|---|
| Single | £348 |
| Couple | £464 |
| With children | £812 |
From April 2025, deductions from Universal Credit for loan repayments will be capped at 15% of the standard allowance, down from 25%.
Charitable Grants
Charitable grants are available for specific circumstances, such as disability, illness, or bereavement. Turn2us offers an online tool to find grants for which you may qualify.
Energy Provider Assistance
Many energy companies provide financial help for customers in need. Notable options include:
- British Gas Energy Trust: Grants of up to £2,000
- Discounts or tailored payment plans from suppliers like EDF, Scottish Power, and Octopus
Council Tax Reduction
You could receive up to 100% off your council tax bill if you meet specific criteria or receive qualifying benefits. Contact your local council to apply for a reduction or discretionary assistance.
Warm Home Discount
Eligible households can receive a £150 discount on electricity bills, applied automatically if criteria are met.
Free Childcare
Working parents in the UK can access 30 hours of free childcare for children aged 3–4. Recent expansions now include:
- 15 hours of free childcare for 2-year-olds (as of April 2025)
- Coverage for children from 9 months (as of September 2025)
Parents must apply online and reconfirm eligibility every three months.
Increases
All working-age benefits will increase by 1.7%, in line with inflation, while the State Pension will rise by 4.1% under the triple lock.
| Benefit/Pension | Increase |
|---|---|
| Universal Credit | 1.7% |
| Disability Benefits | 1.7% |
| State Pension | £472 annually (4.1%) |
Energy Price Cap
Ofgem raised the energy price cap from £1,717 to £1,738 in January, with another increase of 3–5% anticipated in April. This affects most households on standard variable tariffs and reflects rising wholesale energy costs.
The price cap limits the maximum unit rate energy suppliers can charge but does not cap total bills.
With these updates, managing the cost of living may feel daunting, but Knowing available benefits and financial support can help households navigate this challenging time.
SOURCE – LINK
FAQs
What benefits are paid in February?
Universal Credit, pensions, and disability benefits are paid as usual.
How much can I borrow with a budgeting advance?
Up to £812 if you have children, or £348 if you’re single.
What is the Household Support Fund?
Funding from councils to support vulnerable households with bills or grants.
Will benefits increase in 2025?
Yes, all benefits will rise by 1.7% in April, matching inflation.
What is the current energy price cap?
Ofgem set the price cap at £1,738 for January to March 2025.
