December 2025 brings a flurry of financial activity beyond the festive spending spree. From a welcome bonus for some households to crucial updates on the nation's economic health, here is your complete guide to the money changes that will affect your wallet.
Direct Financial Support and Key Dates
As the cost of living continues to be a pressing issue for many, several government-led supports and financial announcements are scheduled for the final month of the year.
The Department for Work and Pensions (DWP) Christmas bonus is set to arrive in eligible bank accounts from the start of December. This tax-free payment of £10 will be issued to those claiming certain benefits and should be received by January 1 at the very latest. It will not impact any of your other benefit entitlements.
Furthermore, thousands of benefit claimants will see their payments arrive early due to the bank holidays. If your usual payment date falls on Christmas Day (Thursday, December 25) or Boxing Day (Friday, December 26), you can expect to be paid on Wednesday, December 24. Similarly, payments due on New Year's Day (Thursday, January 1) will likely land in accounts on Wednesday, December 31.
Economic Health Check: Inflation and Interest Rates
Two major indicators of the UK's economic wellbeing will be updated in mid-December, offering a glimpse into the financial landscape heading into the new year.
First, the Office for National Statistics (ONS) will release the latest inflation data on December 17. This figure, which measures how prices for goods and services have changed, currently stands at 3.6%. This is a significant drop from its peak of 11.1% in October 2022, but remains a key concern for household budgets.
The following day, on December 18, the Bank of England will announce its next decision on interest rates. The base rate, which influences the cost of borrowing for millions, is currently at 4%. This marks five consecutive cuts since August 2024, down from a peak of 5.25%.
Ongoing Winter Support and Tax Deadlines
Several vital support schemes designed to help with seasonal costs will continue throughout the month. The DWP's Cold Weather Payment scheme remains active, triggering a £25 payment when temperatures in your area are recorded as, or forecast to be, zero degrees Celsius or below for seven days in a row.
Additionally, the Warm Home Discount, offering £150 off electricity bills, is still available for eligible households. More homes will also receive Winter Fuel Payments, which can be worth up to £300.
For those with additional income, a key tax deadline is looming. Self-assessment taxpayers who want HMRC to collect what they owe through their PAYE tax code must submit their online return by December 30. This option is available if you owe less than £3,000 and are already employed and paying tax through PAYE.
