The £500 Cost of Living Payment is a non-taxable, one-time payment designed to provide timely help during a financially stressful period. With the cost of essentials still significantly higher than before the pandemic, this government-backed payment will be credited automatically to the accounts of those receiving qualifying benefits. That includes people on Universal Credit, Pension Credit, and other income-related support.
Unlike regular benefits, this payment is not something you apply for. The Department for Work and Pensions (DWP) and HMRC will use their existing records to identify who qualifies. If you have been worried about managing your bills this autumn, this support might just give you the breathing room you need. The payment is expected to roll out from September through November 2025, helping people prepare for the winter months ahead.
Overview Table: £500 Cost-of-Living Payment 2025 Backed by DWP
| Key Details | Information |
| Payment Amount | £500 one-off payment |
| Delivery Start Date | October 2025 |
| Delivery Method | Direct to bank accounts already used for benefits |
| Who Pays | Department for Work and Pensions (DWP) and HMRC |
| Taxable | No, it is completely tax-free |
| Application Needed | No, paid automatically to eligible claimants |
| Payment Window | September to November 2025 |
| Who Qualifies | Recipients of Universal Credit, Pension Credit, Tax Credits, and income-related benefits |
| Bank Statement Reference | “DWP COL” or “HMRC COL” |
| Purpose | To support low-income households with rising living costs |
What is the £500 DWP Cost of Living Payment?
The £500 Cost of Living Payment is part of the UK government’s ongoing efforts to support households hit hardest by inflation. Food prices have remained high in 2025, with essentials costing about 25 percent more than they did in 2021. Housing and energy bills have also stretched budgets thin. This payment acts as a financial cushion during a time when even basic expenses can feel overwhelming.
Since 2022, the government has issued several cost of living payments. This latest round, planned for autumn 2025, builds on that approach by offering direct help with no strings attached. There is no impact on your benefits, and you will not be taxed on the payment. It is meant to cover urgent needs such as groceries, heating, and transport — and to make a real difference as winter approaches.
Eligibility criteria for the payment
Eligibility is tied to receiving certain income-based benefits. If you are already claiming one of these, and meet the qualifying date (to be confirmed closer to payment time), the £500 will be automatically issued. Here is who qualifies:
- Universal Credit
- Pension Credit
- Income-related Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Income Support
- Working Tax Credit
- Child Tax Credit
- Disability benefits such as Personal Independence Payment (PIP), Disability Living Allowance (DLA), and Attendance Allowance (some cases)
- Carer’s Allowance under certain conditions
Pensioners who are not currently receiving Pension Credit may still qualify if they apply soon and backdate their claim to the eligible period. This is especially important, as many pensioners who qualify for support are not yet claiming it.
Payment dates and process
The Department for Work and Pensions has confirmed that payments will start going out in October 2025. Depending on the benefit you receive and the department handling your claim, the payment date may differ slightly. Here is the general timeframe:
- Universal Credit: Between 7 October and 20 October 2025
- Pension Credit: Mid-October 2025
- Tax Credits: Late October 2025 (via HMRC)
- ESA, JSA, Income Support: Early to mid-October 2025
- Disability Benefits (PIP, DLA): Between October and November 2025
If you qualify, the payment will land in your account with a reference like “DWP COL” or “HMRC COL” so you can clearly identify it.
How the payment is made?
You do not need to apply for the £500 Cost of Living Payment. The DWP and HMRC will use existing benefit records to confirm who is eligible and then send the money directly to the account where your usual payments go. This makes the process fast, simple, and secure.
In rare cases where claimants receive payments via Post Office card accounts or paper cheques, the same method will be used. There is no need to call or contact the DWP to request the payment, which also helps prevent scams asking for your bank details.
Impact of the £500 payment
This payment could be a lifeline for many households, especially with energy prices still unstable and food costs remaining high. For families juggling rent, bills, and groceries, the extra £500 can help ease the pressure.
It is especially important for those on low incomes or fixed pensions. Winter months often bring increased expenses, and this targeted support could reduce the risk of people falling into debt just to keep warm or put food on the table. While it is not a long-term fix, the payment provides immediate support when people need it most.
Frequently Asked Questions
Who qualifies for the £500 Cost of Living Payment in 2025?
If you receive a means-tested benefit like Universal Credit, Pension Credit, or Working Tax Credit, and meet the qualifying date, you should automatically qualify.
Do I have to apply to get the payment?
No, the payment is automatic. It will be paid using your existing benefit information, so no separate application is needed.
When will I get the £500?
Payments begin in October 2025, but the exact date depends on the benefit you receive. The full rollout will continue into November.
Will this pay You can still apply?
No, the £500 payment is non-taxable and does not affect your entitlement to other benefits. It is completely separate.
What if I am a pensioner not claiming Pension Credit yet?
You can still apply. If your claim is approved and backdated to cover the qualifying period, you could still receive the payment.
