As the UK reaches the halfway point of 2026, many households are feeling increased cost of living pressures amid ongoing economic uncertainty. The US-Iran war has disrupted global oil trade, driving up prices for essentials like energy and food, with fears that the impact could persist beyond this year.
Inflation fell to 2.8% in the year to April, down from 3.3% in March, but experts warn of a potential spike to 4% by year-end. According to the Cost of Living Action group, 63% of Britons have cut back on essentials, while the Resolution Foundation reports that 55% of households in poverty contain at least one working person.
Around 24 million people in the UK claim some form of Department for Work and Pensions (DWP) benefit, including state pension. However, Policy in Practice estimates £24bn in benefits goes unclaimed annually. Households are urged to check their eligibility for support.
In June, benefit payments will proceed as usual with no bank holidays affecting schedules. The DWP has mostly completed the migration of legacy benefits to Universal Credit, though Employment and Support Allowance and Housing Benefit will remain open until the end of summer for vulnerable claimants.
From April 2026, Universal Credit standard allowance increased by 6.2%, while most other benefits rose by 3.8%. The state pension increased by 4.8% to £241.05 per week. However, the health-related element of Universal Credit for new claimants was cut from £105 to £50 per week, with existing claimants' rate frozen until 2029.
Councils are now administering Labour's new 'Crisis and Resilience Fund', which replaces the Household Support Fund and Discretionary Housing Payments. It offers crisis payments to low-income households facing financial shocks, with eligibility criteria set locally.
