March 2025 will bring significant shifts in Department for Work and Pensions (DWP) policies and financial regulations, impacting benefits, pensions, taxes, and household costs for millions of UK residents. Staying informed about these updates is crucial to avoid financial setbacks and take advantage of new opportunities.
Below is a detailed breakdown of the nine major policy changes and how they may affect you.
Benefit Payments
Starting in April 2025, benefit payments will increase by 1.7%, reflecting inflation figures from September 2024. This includes:
- Universal Credit
- Personal Independence Payment (PIP)
- Disability Living Allowance (DLA)
- Attendance Allowance
- Carer’s Allowance
- Employment and Support Allowance (ESA)
While this increase provides some relief, advocacy groups argue it may not be enough to offset rising living costs. Claimants should check the DWP website for updated payment schedules.
State Pension Increase
Following the triple lock policy, state pensions will rise by 4.1% in April 2025, based on 2024 wage growth figures. This means:
- Full new state pension: ~£11,502 per year (increase of ~£472)
- Basic state pension: ~£8,720 per year
Pensioners can verify their updated payments on the Gov.uk pension service.
Household Support Fund
The Household Support Fund (HSF), which provides emergency aid for low-income households, will end on March 31, 2025.
Those relying on HSF grants should look for alternative support through local council grants or Citizens Advice services.
Winter Fuel Payment
The Winter Fuel Payment helps pensioners cover heating costs. The claim deadline is March 31, 2025.
Eligible pensioners may receive between £250 and £600, depending on age and living situation. Applications can be submitted through Gov.uk Winter Fuel Payment.
Universal Credit
The DWP will continue moving claimants from legacy benefits (such as income-related ESA and Working Tax Credit) to Universal Credit.
Recipients receiving a migration notice must apply within three months to avoid payment disruptions. More details are available on Gov.uk Universal Credit.
Stamp Duty Exemption Threshold
The first-time buyer stamp duty exemption will be lowered in April 2025. Buyers completing purchases before March 31, 2025, can still benefit from the higher threshold, potentially saving thousands of pounds.
More details on stamp duty rates can be found at HMRC Stamp Duty.
National Minimum Wage
As part of the annual wage review, the National Minimum Wage is expected to rise to £11.44 per hour for workers aged 23 and over.
This will provide higher earnings for low-wage workers across the UK.
Council Tax Increases
Many local councils are expected to raise council tax by approximately 5%, adding around £100-£200 per year to household bills.
Residents should check their updated rates at Gov.uk Council Tax.
Energy Price Cap
Ofgem’s next energy price cap adjustment may result in higher household energy bills.
Households are advised to look into fixed-rate energy tariffs to avoid price fluctuations. More details can be found at Ofgem Energy Price Cap.
These DWP and financial policy changes could significantly impact your benefits, taxes, and savings. Staying updated and preparing ahead will help you navigate these shifts effectively.
FAQs
When will benefit payments increase?
Benefit payments will rise by 1.7% starting in April 2025.
How much is the state pension increase for 2025?
The state pension will rise by 4.1%, increasing to ~£11,502 per year.
When does the Household Support Fund end?
The fund will end on March 31, 2025, requiring beneficiaries to find alternatives.
What is the new National Minimum Wage?
It is expected to rise to £11.44 per hour for workers aged 23 and over.
Will council tax increase in 2025?
Yes, many councils plan a 5% increase, adding £100-£200 annually.
