A host of major changes are coming in 2025 for Department for Work and Pension (DWP) benefits and the state pension. One of the biggest will be the end of the DWP Managed Migration programme and an end to legacy benefits. In addition, Scottish benefit claimants will transition onto new ones, managed by Social Security Scotland as part of its devolved benefits plan.
Lastly, the deadline for National Insurance top-ups is looming, having been postponed twice. It’s worth putting a note in your diary to make sure you are aware of what changes will affect you and when they are coming into effect. Below are all the DWP changes happening throughout 2025 that you should know about.
January
Attendance Allowance recipients in Scotland will start to be automatically transferred to a new benefit named the Pension Age Disability Payment (PADP). The PADP is the 15th benefit administered by Social Security Scotland and is designed for people of State Pension age and over who are disabled, have a long-term health condition that necessitates assistance with self-care or supervision for safety, or are terminally ill, reports the Mirror.
The benefit, which is not means-tested, ranges in value from £290 to £434 per month depending on the recipient’s needs. It began accepting new applications in October 2024; however, those currently claiming the DWP equivalent will automatically start to transition over.
March
The government-funded Household Support Fund cost-of-living scheme, introduced by the Tory Government in October 2021, is set to end on March 31 next year under current plans. This scheme provided local councils with funds to support those most affected by the rising cost of living in their area.
The types of support offered through the scheme include cost of living payments, energy and supermarket vouchers, and council tax bill discounts. In September, Labour extended the scheme for another six months with an additional £85million in funding.
However, Labour has not committed to a further extension at the time of writing. The scheme operates on a first-come, first-served basis, and once a council’s allocated funding is exhausted, it’s gone for good. For more information on the individual support they offer, you should check your local council’s website.
The changeover to Carer’s Allowance is expected to be completed by March. In Scotland, Social Security Scotland has begun the process of transferring individuals from Carer’s Allowance to a new devolved benefit, Carer’s Support Payment.
The transition started in February 2024, and by November, the new benefit was available to new claimants across Scotland. The Scottish government anticipates that the transfer will be completed by Spring 2025.
The process is automatic, meaning recipients do not need to take any action to receive the new benefit. Both the DWP’s Carer’s Allowance and the Carer’s Support Payment offer £81.90 per week.
Social Security Scotland will write to people in advance of their award transfer and will send a confirmation letter once the process is complete.
Also from March, claimants will begin transitioning to a new disability benefit. In Scotland, those receiving the DWP benefit Disability Living Allowance (DLA) will start being moved over to another devolved Scottish Benefit, Scottish Adult DLA.
This move is part of the Scottish devolution plan. The transfer will commence at the end of March 2025, and those claiming will be automatically moved over.
The Scottish government has stated that the transition will occur in stages and will not happen to everyone simultaneously. It is expected to take until the end of 2025 to transfer all benefits.
April
Benefit payments are set to increase. The chancellor confirmed in the October budget that working-age benefits would rise by 1.7% from April 2025, in line with September’s inflation rate.
The Department for Work and Pensions (DWP) is legally obliged to increase nine benefits in line with inflation each April, while other payments, including Universal Credit, require Parliamentary approval. The Mirror has provided a comprehensive list detailing the exact increases in payments expected next April.
State pension recipients can also anticipate an increase next year as part of the Triple Lock promise. This scheme ensures state pension payments rise by the highest of three factors: the Consumer Price Index (CPI) for September, average wage growth between May and July, or 2.5%.
State pensions will increase by wage growth, which currently stands at 4%. Those claiming the New State Pension – a group of 3.4 million people – will see a yearly rise of £461 from April 2025. Meanwhile, those receiving the Old State Pension can expect a £353 annual increase from April.
Tax Credit benefits are set to be discontinued for good on April 5, with the termination of all remaining accounts. Thousands of individuals in Britain currently receiving Tax Credits have been issued a Migration Notice in recent years, urging them to apply for Universal Credit as an alternative.
Those who continue to receive payments this month will lose them entirely – even for those who have renewed their benefit for another year. According to the DWP’s official website: “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.”
Post-claim, claimants must anticipate a five-week wait for the initial Universal Credit disbursement, which will then persist barring any changes in the claimant’s situation.
The deadline to make voluntary contributions to boost one’s state pension is scheduled for April 5, 2025. Previously set for April 5, 2023, this deadline was first extended to July 2023 and ultimately to April 2025 after the efforts by Martin Lewis, originator of MoneySavingExpert.com, created heightened public awareness resulting in overloaded phone lines to the Future Pension Centre.
Under the existing regulations, to claim the full new state pension, you need 35 qualifying years on your National Insurance record – some individuals may require more. If there are gaps in your record, you could end up receiving much less than anticipated, but you can buy National Insurance years or claim free National Insurance credits to fill any gaps.
Currently, you can purchase missing National Insurance years dating back to 2006, but after the deadline, you’ll only be able to go back six tax years. A top-up for a missed qualifying year costs £824 at present and increases your pre-tax annual state pension entitlement by £302.
From April 5, the Carer’s Allowance working limit will be increased, meaning that carers will be able to earn more from work each week and still claim the benefit. The increase, first announced in Labour’s initial Autumn Budget, will allow carers to work an additional 16 hours a week at the minimum wage or £45 a week, raising the limit to £196 a week.
Currently, Carer’s Allowance, claimed by approximately 1.4 million people in the UK, is worth £81.90 a week and is awarded if you care for someone for at least 35 hours a week. You can work alongside it, but you cannot earn over £151 a week after tax, National Insurance, pension contributions, and allowable expenses – if you earn even £1 over, then you lose your entire entitlement for the benefit.
September
Free childcare will be available for children under five from September 2025. Eligible working parents of children aged nine months to five years old will be entitled to 30 hours of childcare a week.
At present, eligible working parents of children aged from nine months to two years old can access 15 hours of free childcare a week, while parents of three and four year olds can access 30 hours of government-funded childcare. To qualify for the new hours, parents must earn at least the equivalent of 16 hours a week at minimum wage, but less than £100,000 a year. This applies to both parents in a couple, as well as single parents.
Free childcare hours are typically taken over 38 weeks (to cover term time) but you can usually spread it out to cover more weeks by using fewer hours a week. The free hours must be used with a registered childcare minder, such as some private nurseries or state-run pre-schools.
November
In Scotland, the new benefit Pension Age Winter Heating Payment is expected to be launched, replacing the Winter Fuel Payment. Social Justice Secretary Shirley-Anne Somerville confirmed the news in November, stating that those in receipt of qualifying benefits like Pension Credit would receive £200 or £300 depending on their age.
All other pensioner households will receive £100 and only one payment will be made per household. No further details have been announced, although it is believed that around 900,000 Scots would be eligible for the support payment.
December
As part of the Department for Work and Pensions’ (DWP) plan to transition all legacy benefit claimants onto Universal Credit, those claiming income-related Employment Support Allowance (ESA) will be the last to move. All migration notices are expected to be sent out by the end of the year, with the transfer of ESA claimants set to be completed by December.
From this point onwards, individuals claiming ESA will need to submit a claim for either Universal Credit or Personal Independence Payment (PIP), if they meet the eligibility criteria.
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