11 DWP benefit and state pension changes coming in 2025
11 changes coming to Department for Work and Pensions benefits in 2025 have been revealed. Under the new Labour Party government, benefits are set to rise for claimants this year - but there are plenty of changes coming too.
It isn't all good news for those who claim benefits, as a swing of changes are being rolled out by the government in a shake up. Despite the mixed bag, benefits claimants are reminded they'll see a rise in their payments from the fourth month of the year.
There are nine benefits which the Department for Work and Pensions (DWP) is legally required to increase in line with inflation each April, while other payments, including Universal Credit, are subject to Parliamentary approval.
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The chancellor confirmed in the October budget that working age benefits will be uprated by 1.7% from April 2025, in line with the September's rate of inflation.
Attendance Allowance claimants move - January
In Scotland, people getting Attendance Allowance will begin to be automatically transferred to the new benefit called the Pension Age Disability Payment (PADP). You do not need to apply for Pension Age Disability Payment if you live in Scotland and get Attendance Allowance.
Social Security Scotland will move you to Pension Age Disability Payment without you having to do anything in 2025 and send you a letter telling you what will happen when you transfer. If you already get Adult Disability Payment, you’ll stay on it when you reach State Pension age. You will not transfer to Pension Age Disability Payment.
Household Support Fund ends - March
Under current plans, the government-funded Household Support Fund cost-of-living scheme will end on March 31 next year. £421m has been made available to County Councils and Unitary Authorities in England to support those most in need with the cost of essentials via the Household Support Fund
Carer's Allowance changeover - spring
If you get Carer's Allowance and live in Scotland, you do not need to apply for Carer Support Payment. Your benefit will move to Carer Support Payment. This is happening between February 2024 and spring 2025. Learn more about moving from Carer’s Allowance to Carer Support Payment.
Carer Support Payment is normally paid every 4 weeks, at the end of the 4 weeks. If you move from Carer's Allowance to Carer Support Payment, you can get paid weekly. It can be paid into a UK bank account. This can be your own account or someone else’s. If you do not have a UK bank account, Social Security Scotland will contact you about payment options after you apply.
Claimants to be moved to new disability benefit - March
Social Security Scotland is taking over the administration and payment of Disability Living Allowance (DLA) from the Department for Work and Pensions ( DWP ). This is happening as part of Scottish devolution. From the end of March 2025, DLA awards will start automatically moving to a new benefit called Scottish Adult DLA.
Benefits payments to rise - April
Chancellor Rachel Reeves confirmed how much DWP benefit payments will rise by in her autumn budget. Benefits including Child Benefits, Universal Credit and Personal Independence Payments (PIP) will increase by 1.7 per cent next April, in line with inflation figures from September.
Those who receive the state pension will also see rises next year as part of the Triple Lock promise. The triple lock sees state pension payments rise by whatever is highest out of the Consumer Price Index (CPI) for September, the average growth for wages between May and July, or 2.5%.
State pensions will rise by wage growth which sat at 4%. Those who claim the New State Pension - which is claimed by 3.4million - will see a yearly rise of £461 from April 2025. Those claiming the Old State Pension will see a £353 yearly rise from April.
Tax Credit benefits to close for good - April
Universal Credit is replacing tax credits. The Department for Work and Pensions (DWP) or the Department for Communities (for Northern Ireland customers) will write to all eligible customers during 2024 and inform them of the need to move to Universal Credit, to continue to receive financial support. If you do not claim by the deadline date in that letter your existing tax credits payments will stop, even if you have just renewed your tax credits claim.
If you are claiming tax credits and are State Pension age or over, the DWP or the Department for Communities will write to you to ask you to apply for Universal Credit or Pension Credit, depending on your circumstances. A very small number of customers will not be eligible for Universal Credit or Pension Credit. These customers will be able to remain on and receive tax credits until 5 April 2025, unless a change in their circumstances ends tax credits sooner. After this date, tax credits will end, and no further tax credits payments will be made. Your 2024 to 2025 tax credits notices may show some predicted payments for the tax year 2025 to 2026. These are automatically generated and should be disregarded. You do not need to do anything now.
Deadline to top up state pension payments - April
The deadline to fill gaps in your National Insurance record for tax years 2006 to 2018 is fast approaching on 5th April 2025. Taking action now to address any missing contributions could significantly boost your state pension. After this deadline, you’ll only be able to top up missing National Insurance for the previous six tax years (2019/20 to 2024/25). It’s essential to review your National Insurance record promptly to ensure you maximise your state pension benefits.
Carer's Allowance working limit to be lifted - April
Helen Walker, Chief Executive at Carers UK, said: “It’s fantastic to hear that the Government will increase the earnings threshold for Carer’s Allowance allowing 60,000 more carers juggling work and care to access this benefit. It’s the largest increase in the earnings limit for Carer’s Allowance since it was introduced in 1976.
“Carers working and claiming Carer’s Allowance can now take on additional hours to earn up to £196 per week from April 2025, or over £10,000 a year. This is a vital poverty prevention measure helping many carers, particularly women, stay in the labour market. It will make a noticeable difference for many, and for the first time in decades, carers will not lose out as the National Living Wage rises. It will help to put much needed cash into the pockets of working carers who do so much to look after their disabled, ill and older relatives.
“Many carers are still struggling with their finances whilst providing so much for society. In addition to today’s announcement, we need to see a full review of Carer’s Allowance as the lowest benefit of its kind at only £81.90 per week for providing a minimum of 35 hours of care. 45% of carers receiving Carer’s Allowance are struggling to make ends meet and urgent steps must be taken to further tackle poverty for carers and their families.”
Free childcare for children under five - September
From September 2024 – working parents of children aged 9 to 23 months can access 15 hours of funded childcare. From September 2025 – working parents of children aged nine months upwards can access 30 hours of funded childcare per week, right up to their child starting school. Depending on your provider, these hours can be used over 38 weeks during term time, or up to 52 weeks if you use fewer than your total hours per week.
The funding is not intended to cover the costs of meals, nappies or additional activities, such as trips. Providers may charge a fee for these additions.
Pension Age Winter Heating Payment to be launched - winter
In Scotland, the new benefit Pension Age Winter Heating Payment is expected to be launched, replacing the Winter Fuel Payment. Pension Age Winter Heating Payment helps people of pension age who receive certain benefits pay their heating bills. It replaces Winter Fuel Payment for people in Scotland and has the same eligibility rules. In winter 2024, the payment will be paid by the Department for Work and Pensions (DWP).
Employment Support Allowance (ESA) to end - December
All migration notices are set to be sent by the end of the year, and by December the transfer of people claiming ESA will be completed. From December, people claiming ESA will need to put in a claim for Universal Credit or Personal Independence Payment (PIP) if they fit the criteria.