The Department for Work and Pensions (DWP) has confirmed that a new £720 Cost of Living Payment will be rolled out in September 2025. This update is designed to support millions of households across the UK who are struggling with rising bills, food prices, and everyday living costs.
In this detailed guide, we will explain exactly who is eligible, when payments will arrive, and what pensioners, families, and benefit claimants need to know.
What Is the September 2025 Cost of Living Payment?
The Cost of Living Payment is a one-off financial boost from the UK Government aimed at helping low-income households cope with inflation, soaring energy bills, and food price increases.
The September 2025 payment has been set at £720 per eligible household. Unlike regular benefits, this is a separate lump sum that will not affect your other entitlements.
Why Is the Payment Needed in 2025?
Many families and pensioners have faced relentless financial pressure:
- Rising food costs – staples like bread, milk, and vegetables have increased by more than 12% in the last year.
- Energy bills – while the price cap has eased slightly, winter 2025 is expected to bring higher heating costs.
- Housing expenses – rent and mortgage payments continue to climb.
- Fixed incomes – pensioners, Universal Credit claimants, and those on disability benefits struggle most, as their income does not rise in line with inflation.
The government has introduced the £720 support to prevent vulnerable households from slipping deeper into hardship.
Who Will Receive the £720 Payment?
Eligibility is based on whether you receive certain qualifying benefits. If you are on any of the following, you are likely to get the payment:
- Universal Credit
- Pension Credit
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Income Support
- Working Tax Credit
- Child Tax Credit
Pensioners and the September 2025 Payment
Pensioners are among the groups most affected by cost-of-living pressures.
- If you are receiving Pension Credit, you will automatically qualify for the £720 support.
- If you are only receiving the State Pension, you will not automatically be eligible unless your income is low enough to qualify for Pension Credit.
- The DWP has urged pensioners to check eligibility for Pension Credit before September 2025. This could mean not only gaining the £720 payment but also unlocking other benefits such as housing support and free NHS dental treatment.
When Will the Payments Be Made?
The DWP has confirmed the following schedule:
- Payments will begin in mid-September 2025.
- Rollout will be staggered over 3–4 weeks.
- Most households should receive the £720 by early October 2025.
You do not need to apply separately – payments will be made automatically into the same bank account where your benefits or pension are received.
Will It Affect Other Benefits?
No. The £720 payment is tax-free and does not count as income when calculating benefits.
This means it will not reduce:
- Housing Benefit
- Council Tax Support
- Universal Credit
- Pension Credit
- Any other income-related support
What If You Don’t Receive the Payment?
If you believe you qualify but do not receive the payment by October 2025, the DWP has advised:
- Wait until the rollout ends – some payments may take longer depending on bank processing.
- Check benefit eligibility – ensure you were claiming a qualifying benefit during the assessment period.
- Contact the DWP – if you were eligible but missed out, you can make a claim.
How Does This Compare to Previous Payments?
Over the past three years, the government has issued several cost-of-living payments:
- £650 in 2022 (split into two instalments)
- £900 in 2023 (split into three instalments)
- £600 in 2024 (for pensioners and benefit claimants)
The £720 in 2025 is one of the largest single payments, showing that inflation and living pressures remain a major government concern.
Why £720 Instead of Smaller Instalments?
Unlike previous years, the DWP has opted for a single lump sum in 2025. The reasoning is:
- To give households more control over how they manage their finances.
- To help people cover large upcoming bills, such as winter heating costs.
- To reduce administrative delays caused by multiple instalments.
Impact on Pensioners
For pensioners, especially those on fixed incomes, the payment is vital.
- It may cover 2–3 months of energy bills.
- It can help with unexpected medical or household expenses.
- Pensioners living alone will particularly benefit, as their single incomes stretch less far.
Families with Children
Families on Child Tax Credit or Universal Credit will also receive the £720.
This support is expected to help with:
- Back-to-school expenses in September.
- Rising food bills for larger households.
- Transport and childcare costs.
Disability and Carers Support
Households on disability-related benefits (through income-based ESA or similar) will qualify.
This provides essential relief for:
- People with long-term health conditions.
- Carers who often face higher costs due to medical needs, mobility equipment, or home adjustments.
How to Prepare for the Payment
Here are steps you should take before September:
- Check your eligibility – apply for Pension Credit if you are over State Pension age and on a low income.
- Update bank details – ensure your account information with the DWP is correct.
- Budget wisely – plan ahead for how you will use the £720 to cover essentials.
Potential Criticism of the Payment
While many welcome the £720 payment, some critics argue:
- It is only a short-term solution and does not address long-term poverty.
- Rising prices mean that £720 may not stretch far enough for larger families.
- Regular increases to benefits and pensions might be a better long-term fix than one-off lump sums.
Government’s Long-Term Plan
The government has suggested further steps may include:
- Annual reviews of State Pension and Pension Credit in line with inflation.
- More investment in energy efficiency to lower household bills.
- Stronger protections against food and fuel price volatility.
Key Takeaways
- £720 Cost of Living Payment confirmed by the DWP.
- Payments start in mid-September 2025.
- Available to pensioners (on Pension Credit), Universal Credit claimants, and other qualifying households.
- Tax-free, one-off lump sum that does not affect other benefits.
- Pensioners and low-income families are urged to check eligibility before September.
Final Thoughts
The £720 Cost of Living Payment in September 2025 is a much-needed lifeline for millions of UK households. While it may not solve all financial challenges, it provides essential breathing space at a time when prices remain high.
For pensioners, families, and those on low incomes, this payment could mean the difference between falling behind and staying afloat.
The government continues to encourage eligible pensioners to apply for Pension Credit, ensuring no one misses out on the support they deserve.