As the new year approaches, millions of households across the UK continue to grapple with a severe cost of living crisis, with rising bills and stagnant wages squeezing budgets. Against this challenging economic backdrop, it is more crucial than ever for individuals and families to access all the financial support they are entitled to receive.
Key Payment Dates for January 2026
Most benefit and state pension payments will be issued as usual in January. However, due to the New Year's Day bank holiday on Thursday 1 January, there is one important change to note. Anyone scheduled to receive a payment on that day should instead receive their funds on Wednesday 31 December 2025.
Similar adjustments apply for the Christmas period. Payments due on Christmas Day (Thursday 25 December) or Boxing Day (Friday 26 December) will be paid early, on Christmas Eve, Wednesday 24 December.
The benefits affected by these holiday payment changes include:
- Universal Credit
- State Pension
- Pension Credit
- Child Benefit
- Personal Independence Payment (PIP) and Disability Living Allowance (DLA)
- Carer's Allowance
- Employment and Support Allowance (ESA)
- Income Support and Jobseeker's Allowance
State Pension Payment Schedule
The basic state pension is typically paid every four weeks directly into a bank account. The specific day of the week you are paid depends on the last two digits of your National Insurance number:
- 00 to 19: Monday
- 20 to 39: Tuesday
- 40 to 59: Wednesday
- 60 to 79: Thursday
- 80 to 99: Friday
The same bank holiday payment adjustments apply to state pension payments as to other benefits.
Upcoming Increases to Benefit Rates
Significant changes to benefit rates are scheduled for April 2026. Universal Credit standard allowances will rise by approximately 6.2%, an above-inflation increase. For a single claimant aged 25 or over, this means a weekly rise from £92 to £98. For couples where one or both partners are over 25, payments will increase from £145 to £154 per week.
Most other benefits, including PIP, DLA, and Carer's Allowance, are set to be uprated by 3.8%, in line with the previous September's inflation rate.
However, a major reduction is also planned. The health-related element of Universal Credit for new claimants will be cut from £105 to £50 per month, a reduction of over £200 monthly. The rate for existing claimants will be frozen until 2029.
The state pension will increase by 4.8% from April 2026, in line with average earnings growth. This will raise the weekly payment to £241.05.
Essential Cost of Living Support Available
Beyond regular benefits, a range of additional support is available for those struggling with essential costs.
Budgeting Advance Loans: Interest-free loans for Universal Credit claimants facing an emergency, repayable over two years. From April 2025, deductions for repaying these and other debts are capped at 15% of the standard allowance.
Household Support Fund (HSF): Distributed by local councils until March 2026, this fund can provide cash grants, help with bills, or essential appliances. Eligibility and offer amounts vary by local authority.
Energy Provider Assistance: Many suppliers, including British Gas, EDF, E.ON, and Octopus, offer grants, debt advice, and free energy-saving devices to customers in difficulty.
Social Tariffs: Reduced rates for broadband and water are available from most providers for those on low incomes or certain benefits. Ofcom provides a guide to broadband social tariffs.
Council Tax Reduction: Those on low incomes or benefits may be eligible for a discount of up to 100% on their council tax bill. Applications are made through the local council.
Free Childcare: Since September 2025, all working parents in the UK are entitled to 30 hours of free childcare for children under four.
With inflation remaining high and living standards under pressure, experts urge all households to check their eligibility for support. Research by Policy in Practice indicates that a staggering £24 billion in benefits goes unclaimed every year.
