Millions of Britons are set to receive their benefit and state pension payments as usual in January 2026, but the New Year's Day bank holiday will shift some payments to December 31, 2025. The Department for Work and Pensions (DWP) has confirmed that anyone due a payment on January 1 will instead receive it on New Year's Eve.
Similarly, Christmas payment changes apply: those due payments on December 25 or 26, 2025, will receive them on Christmas Eve. The basic state pension follows the same rules and is paid every four weeks based on National Insurance number digits.
From April 2026, Universal Credit claimants will see an above-inflation increase of 6.2% to the standard allowance, with single people over 25 receiving an extra £6 per week and couples over 25 getting £9 more. Most other benefits, including PIP and Carer's Allowance, will rise by 3.8% in line with September's inflation rate.
However, the health-related element of Universal Credit for new claimants will be cut from £105 to £50 per month, with existing claimants' rates frozen until 2029. The state pension will increase by 4.8% from April 2026, based on earnings growth.
The DWP aims to complete the migration of legacy benefits to Universal Credit by January 2026. With £24bn in benefits going unclaimed annually, households are urged to check their eligibility for support.
