If you claim Universal Credit, PIP, Child Benefit, Tax Credits, or the State Pension, August 2025 brings a series of important updates that you can’t afford to miss.
These changes cover payment increases, early bank holiday dates, rate adjustments, and eligibility rules.
This guide lists the 10 most significant changes confirmed by the Department for Work and Pensions (DWP) and HM Revenue and Customs (HMRC) for 2025/26.
You’ll also find a table for a quick overview and a clear explanation of what each update means for you.
10 DWP Key Changes
| # | Change | What it means | Who’s affected | Key dates/amounts |
|---|---|---|---|---|
| 1 | April 2025 uprating | Most DWP & HMRC benefits rose 1.7%; State Pension up 4.1% | Most benefit claimants & pensioners | From April 2025 |
| 2 | Child Benefit increase | £26.05/wk (eldest) & £17.25/wk (others) | All Child Benefit recipients | From 7 April 2025 |
| 3 | HICBC threshold change | Charge starts at £60,000; full removal at £80,000 | Higher earners with children | 2025/26 tax year |
| 4 | UC debt cap cut | Deductions capped at 15% (down from 25%) | UC claimants with repayments | From 30 April 2025 |
| 5 | Household Support Fund | £742m extended for food, bills, essentials | Low-income households | April 2025–March 2026 |
| 6 | Tax Credits end | Must switch to UC if told | Former Tax Credit claimants | Ended 5 April 2025 |
| 7 | Managed migration deadlines | Most letters sent by Dec 2025 | Legacy benefit claimants | 2025 |
| 8 | National Living Wage rise | £12.21/hour for age 21+ | Low-paid workers | From April 2025 |
| 9 | August bank holiday early payment | Payments due 25 Aug paid on 22 Aug | All DWP & HMRC benefit claimants | 22 August 2025 |
| 10 | UC & PIP reform bill | Changes to PIP rules and UC health element | New claimants first | Bill in progress |
April 2025 Uprating- More in Your Payments
From April 2025, most working-age benefits such as Universal Credit, ESA, JSA, and Pension Credit increased by 1.7%. The State Pension rose by 4.1%, giving pensioners an extra boost.
While it’s a small increase compared to rising living costs, it still means more money in your pocket each month.
Child Benefit Rates Are Higher
Child Benefit payments went up in April 2025. The new weekly rates are:
- £26.05 for the eldest or only child
- £17.25 for each additional child
If you receive Child Benefit, the amount is automatically updated—no need to reapply.
High-Income Child Benefit Charge Threshold Raised
The High-Income Child Benefit Charge (HICBC) now starts at £60,000 (up from £50,000). Child Benefit is fully withdrawn when income reaches £80,000.
This change means more families keep their full payment, especially those earning just above the old limit.
Universal Credit Debt Deductions Reduced
If you’re on Universal Credit and have debts being repaid directly from your benefit, the maximum deduction has been cut from 25% to 15%. This puts more money in claimants’ hands and eases pressure on low-income households.
Household Support Fund Extended
The Household Support Fund has been extended until March 2026, with £742 million available for councils to help residents with food, energy bills, and essential costs.
Each local council decides how to distribute its share, so check your area’s website for application details.
Tax Credits Have Ended
Tax Credits officially ended in April 2025. If you were receiving them, you’ll need to switch to Universal Credit if you’ve been sent a Migration Notice. Apply before the deadline to avoid losing income and to qualify for transitional protection.
Managed Migration: Watch for Your Letter
The DWP is sending Migration Notices to all remaining legacy benefit claimants, including some ESA groups. Most people will receive their notice by December 2025. Once you get the letter, you have a set time to claim Universal Credit.
National Living Wage Increased
From April 2025, the National Living Wage for workers aged 21 and over rose to £12.21 per hour. Other age groups and apprentice rates also increased. This may affect your Universal Credit payments if your earnings go up.
August Bank Holiday Early Payments
If your benefit payment date falls on Monday, 25 August 2025 (UK summer bank holiday), you’ll receive your payment on Friday, 22 August 2025 instead.
This applies to all DWP and HMRC benefits, including Child Benefit and the State Pension. Plan ahead, as the gap to the next payment will be slightly longer.
Universal Credit & PIP Reform Bill Updates
A new bill is making its way through Parliament that will:
- Change PIP daily living eligibility rules from November 2026 for new claimants.
- Reform the Universal Credit health element.
These changes are not in effect yet, but they’re worth keeping on your radar if you’re a future claimant.
Action Checklist
- Check your new payment rate on your online account or award letter.
- If on UC with debt deductions, make sure your deduction rate has dropped to 15%.
- If you get Child Benefit, note the new rate and bank holiday payment date.
- If you were on Tax Credits, follow your Migration Notice instructions immediately.
- If struggling financially, apply for help through the Household Support Fund.
August 2025 marks a major turning point for many UK households receiving DWP and HMRC benefits.
From increased payment rates and reduced debt deductions to early bank holiday payments and the end of Tax Credits, these updates will affect millions.
The key is to stay informed, check your letters and payment dates, and act quickly if you receive a Migration Notice or see changes in your benefit statements.
By keeping track of these updates, you can make the most of the support available to you and avoid any disruption to your income.
FAQs
Will I get an extra Cost of Living payment in 2025?
No, there are no new nationwide Cost of Living lump sums in 2025. Support comes through benefit rate increases, the Household Support Fund, and other targeted help.
My payment date is 25 August 2025. When will I get paid?
You will be paid on Friday, 22 August 2025 due to the summer bank holiday.
I’m still on Tax Credits. Do I need to do anything?
Yes. Tax Credits have ended. If you get a Migration Notice, you must apply for Universal Credit before the deadline to avoid losing payments.