£165 Cost of Living Payment in June 2025 – How to Claim Your Support

As the UK faces a deepening economic recession in 2024–25, many households are grappling with fluctuating inflation, skyrocketing energy bills, and dwindling incomes. To help ease the financial burden, the British government has announced a new £165 Cost of Living Payment, which will be distributed to eligible citizens in June 2025. While this £165 may not fully counter inflation, it’s intended to offer some much-needed relief to those struggling the most.

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Who Will Receive the £165 Cost of Living Payment?

The UK Department for Work and Pensions (DWP) has outlined specific eligibility criteria for the £165 Cost of Living Payment. To qualify, you must already be receiving one or more of the following benefits:

Universal Credit
Pension Credit
Income-based Jobseeker’s Allowance (JSA)
Income-based Employment and Support Allowance (ESA)
Income Support
Working Tax Credit
Child Tax Credit

This time around, the eligibility rules are stricter. According to Margaret Willoughby of Citizens Advice Birmingham, you must have been receiving these benefits between January 26, 2025, and February 25, 2025. The government estimates that around 8 million families will benefit, which is a bit lower than previous schemes.

When and How Will You Receive the £165 Cost of Living Payment?

The £165 Cost of Living Payment will start hitting bank accounts from June 8, 2025, for those receiving DWP benefits. If you receive only HMRC tax credits (and no other DWP benefits), you’ll get your payment starting June 16, 2025.

If your benefits come from DWP, the payment will appear as “DWP COL.”
If you’re on HMRC tax credits only, it will be marked as “HMRC COL.”

The government warns citizens to be cautious about scams. Thomas Hargreaves from DWP advises: “If someone calls or messages you claiming to be from the government and asks for your bank details, don’t provide them. The government never asks for your bank details for this payment.”

Also Read – DWP Cost of living support: How and when £326 payment will be paid

Why Is This £165 Cost of Living Payment Needed?

Even though inflation has eased somewhat, many households are still facing financial challenges. The Office for National Statistics (ONS) reports:

Average household income has dropped by 2.9%.
Food price inflation stood at 4.7% in January 2025, down from 19.2% in March 2023, but still a concern.
Energy bills remain much higher than they were before the pandemic.

Dr. Eleanor Jameson, an economic expert, explains: “There’s been some progress, but the financial crisis isn’t over. Many families have used up their savings and are still struggling.”

What Makes This £165 Cost of Living Payment Different?

There are two key differences in this payment scheme:

Lower Assistance Amount:
During the height of the energy crisis in 2022–23, the government provided up to £1,350 in support. Now, this has been reduced to just £165. Former Office for Budget Responsibility chief Robert Chott explains: “The government has scaled back the amount to help manage the fiscal deficit. They believe the worst is behind us.”
Tighter Eligibility Rules:
Previously, eligibility was based on receiving benefits on a specific date. Now, you must have been receiving them continuously during the eligibility period (January 26 – February 25, 2025).

Is the £165 Cost of Living Payment Really Helpful?

Reactions to the £165 Cost of Living Payment have been mixed.

James Bartle, 58, Cardiff (Pension Credit recipient): “£165 is nice, but my energy bill alone is £90 a month. It doesn’t cover everything.”
Karen Wilson, Manchester (single mother and Universal Credit recipient): “This helps me buy the kids’ school supplies without cutting back on food. It’s not a huge help, but it’s something.”
Michael Ashford, director of the Money Advice Trust: “It’s a small step in the right direction, but we still need a long-term solution.”

What’s Next for Low-Income Families?

For now, there’s no word on whether more payments like the £165 Cost of Living Payment will be offered in the future. A Treasury spokesperson says decisions will depend on the economy and available resources.

The Institute for Fiscal Studies predicts it could take until mid-2026 for low-income households to fully recover. Food banks and debt counseling organizations are already bracing for continued demand. William Davies, director of the Trussell Trust, warns: “This payment is helpful, but we expect the need for food support to stay high throughout 2025.”

Final Thoughts

The £165 Cost of Living Payment in June 2025 is a small but crucial step to help millions of UK families cope with economic hardship. Eligible recipients should watch out for fraud and check with the relevant agencies if their payment doesn’t arrive. While this payment offers temporary relief, experts stress that longer-term solutions are essential to secure the financial stability of vulnerable households.

FAQs on the £165 Cost of Living Payment in June 2025

✅ What is the £165 Cost of Living Payment?
It’s a one-time payment from the UK government to help low-income families facing rising costs.

✅ When will the £165 Cost of Living Payment be made?
Payments start from June 8, 2025 (via DWP) and June 16, 2025 (via HMRC for tax credit-only claimants).

✅ How will I get this payment?
It will be directly deposited into your bank account as “DWP COL” or “HMRC COL.”