The Department for Work and Pensions (DWP) has announced two new payments aimed at alleviating the Cost of Living crisis in 2026, extending support beyond traditional benefit claimants.
Launching in April, the Labour government’s £1 billion Crisis and Resilience Fund will be distributed to local authorities, who will have the flexibility to decide the most effective ways to reach and assist those in need. This multi-year fund is designed to replace the short-term Household Support Fund, offering a more sustainable approach to emergency financial aid.
A government spokesperson stated, “We are committed to tackling poverty and providing greater security and opportunity for families across the UK. This £1 billion fund will help prevent households from falling into crisis by giving local authorities confidence to provide timely emergency support.”
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Unlike previous schemes, eligibility criteria will be determined locally, and support will not be confined to individuals receiving DWP benefits. This inclusive approach reflects an understanding that financial hardship affects a broader segment of the population.
Sabine Goodwin, Director of the Independent Food Aid Network (IFAN), highlighted the fund’s transformative potential: “Running over three years, the Crisis and Resilience Fund promises to be critical in the government’s mission to end widespread reliance on emergency food parcels. Delivering local crisis support primarily through cash payments, combined with advice on maximizing income, is key to preventing crises and building financial resilience.”
One focus of the initiative is to provide financial aid for housing costs, replacing the Discretionary Housing Payment scheme from April.
Lucy Schonegevel, Director of Influencing at Action for Children, emphasized ongoing challenges: “While the government has made strides with its Child Poverty Strategy, millions of families still struggle to afford basics. Many families outside of means-tested benefit systems face real hardship and turn to charities and food banks for help.”
Goodwin added, “We hope local authorities will prioritize immediate cash-first crisis support alongside assistance in claiming entitlements. Embedding income-focused crisis responses within strong community support networks will reduce reliance on food banks and help more people achieve financial stability.”