The Department for Work and Pensions (DWP) has announced significant new financial support for millions of households struggling with the ongoing cost of living crisis. Detailed guidance released on Tuesday, 14 January 2026, confirms the launch of a major new fund from April, designed to offer direct help with essentials like food, rent, and heating.
A New £1 Billion Lifeline for Local Councils
From April 2026, the government's new £1 billion a year Crisis and Resilience Fund will be administered by local authorities across the UK. This fund is set to run for a minimum of three years, providing a long-term commitment that replaces the previous Household Support Fund, which was subject to annual renewal.
The fund aims to prevent low-income households from falling into financial crisis. This move comes as research from the Trussell Trust highlights the scale of the problem, finding that 14 million adults are currently going without food because they cannot afford it, compounded by persistently high household bills.
While the Local Government Association has welcomed the multi-year certainty, it expressed concerns in October that the funding may not fully meet local needs. A survey found only two per cent of councils believed it would help to a great extent.
Two Key Payments: Crisis and Housing Support
The DWP guidance outlines two distinct new payments that will form the backbone of the support scheme. Crucially, applicants will not need to be claiming benefits to qualify for the crisis payment, broadening the potential reach of the aid.
The Crisis Payment
This payment is targeted at individuals facing a sudden financial shock or those at immediate risk of crisis. Local councils will have discretion over exact criteria, but the government has instructed that support should not be limited only to benefit claimants.
Eligible situations include being unable to afford food, shelter, heating, or essential household items. Triggers could range from a domestic disaster, health issue, or theft, to fleeing an abusive relationship or experiencing a gap in income.
The DWP has mandated a 'cash-first' approach, meaning direct cash payments or food vouchers should be the primary method of help, unless there is a compelling reason otherwise. This payment is intended for short-term, occasional need and is not meant to supplement regular income.
The Housing Payment
A separate new housing payment will specifically assist with housing costs, effectively replacing the old Discretionary Housing Payment from April 2026. This support can cover rent in advance, deposits, rental shortfalls, or lump sums associated with moving home.
Unlike the crisis payment, this support will be restricted to those already receiving housing benefit or Universal Credit that includes a housing element for rent. However, the DWP notes that those in need who don't meet these criteria could be considered for a crisis payment instead.
This payment can be more long-term and regular. For example, someone seeking work and facing a persistent rental shortfall could receive ongoing support until their income improves.
Government Commitment and Future Impact
A Government spokesperson stated: “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.”
The success of this ambitious scheme will now depend on its rollout by local councils from April 2026. With millions still struggling to afford basics, these new targeted payments represent a core part of the government's strategy to build financial resilience for the most vulnerable.
