Millions of households across the UK are bracing for another month of financial strain as the cost of essentials remains stubbornly high. Recent research from the Resolution Foundation indicates that prices have not returned to pre-pandemic levels, despite inflation slowing. Meanwhile, figures from The Food Foundation show 7.3 million adults experienced food insecurity in January 2025, and energy arrears have more than doubled to £3.9 billion since 2019.
The Department for Work and Pensions (DWP) has confirmed that most benefit and state pension payments will go out as usual in August 2025. However, due to the Summer bank holiday on Monday 25 August, anyone expecting a payment on that date will receive it on the previous working day, Friday 22 August. This applies to all benefits administered by the DWP, including Universal Credit, Personal Independence Payment (PIP), and the state pension.
In April 2025, benefits were uprated by 1.7 per cent in line with the September 2024 inflation figure. The state pension rose by 4.1 per cent under the triple lock, adding £472 per year. Looking ahead, from April 2026, Universal Credit claimants will see above-inflation increases until 2029, starting with at least 2.3 per cent. However, the health-related element for new claimants will be cut from £105 to £50 per month, a reduction of over £200 monthly.
The DWP is continuing the migration of legacy benefits to Universal Credit, aiming for completion by January 2026. Tax credit, income support, jobseeker’s allowance, and housing benefit recipients should have already received migration notices. Additionally, from April 2025, deductions from Universal Credit for debt repayments are capped at 15 per cent of the standard allowance, down from 25 per cent.
Households facing emergency shortfalls can apply for a budgeting advance loan, which is interest-free and repayable over up to two years. With an estimated £23 billion in unclaimed benefits each year, experts encourage people to use tools like the Policy in Practice calculator to check eligibility for additional support.
