Government reveals two new payments to support cost of living in 2026

The cost of living continues to affect millions

The new scheme, which will be launched by the Department for Work and Pensions (DWP), intends to support people with things such as rent, food and energy bills.

This new monetary support comes in the form of two new schemes, one of which will not be restricted to only those on benefits.

Crisis fund

The first of these is the new 'Crisis and Resilience Fund' which will come into action at the start of April and will provide £1bn annually for the next three years to low-income families.

The scheme comes in the wake of damning research from the Trussell Trust that found that around 14 million adults in the UK are going without food because they cannot afford it.

This, alongside some of the highest energy bills in Europe, has led to Brits being squeezed from both sides.

Ultimately, this has led to the establishment of this new fund which will replace the Household Support Fund, helping those struggling to afford the essentials.

The fund will be administered by councils who will decide who will be eligible.

However, the government’s guidance says it should not be limited just to those in receipt of benefits.

The full DWP document on the fund can be read here.

The payment is intended to be a short-term one rather than a replacement for income, with support being distributed in a variety of ways such as food vouchers.

Barnardo’s chief executive Lynn Perry said: “We welcome the publication of the government’s guidance on the new Crisis and Resilience Fund. For too many families, a sudden crisis can push them to the brink, leaving children at risk of going without food, warmth or other essentials.

“This guidance sets out how crisis support can be delivered in a way that protects dignity, offers real choice and reaches those who need it most. It has the potential to make a meaningful difference to children growing up in poverty.”

Housing payment

The second scheme to be introduced is the 'housing payment' which will also be introduced from April.

This new fund will replace the discretionary housing payment, being used in situations of needing rent in advance, a rental deposit, or shortfall.

However, unlike the crisis payment, this one will be restricted to the receipt of certain benefits, either housing benefit, or universal credit with the housing element for rental costs.

A Government spokesperson said: “We're committed to tackling poverty and delivering more security and opportunity for families across the UK.

“The £1bn multi-year Crisis and Resilience fund will help prevent households from falling into crisis by giving local authorities the certainty they need to provide emergency financial support.”