The Department for Work and Pensions (DWP) is set to distribute its annual Christmas bonus in December 2025, with millions of individuals eligible for this payment. The automatic tax-free bonus, amounting to £10, will be deposited into bank accounts during the first week of December, specifically between December 1 and December 7. This longstanding initiative has been in place since 1972, yet the payment amount has remained unchanged despite inflationary pressures over the decades.
Recipients of the Christmas bonus include those on the state pension and individuals claiming certain qualifying benefits. The DWP has confirmed that eligibility is determined based on the qualifying period during the first full week of December. Importantly, there is no need for recipients to apply for the bonus; it will be automatically transferred to the account where they receive their pension or other benefits, identifiable by the payment reference ‘DWP XB’ or simply ‘XB.’
Critics have pointed out that the bonus, which was worth about £165 in today’s money, has not been increased since its inception. This has prompted calls for a reassessment of the Christmas bonus, particularly in light of rising living costs. These discussions may gain traction following Rachel Reeves’s upcoming Autumn Budget announcement on November 26, which is anticipated to include tax increases, as noted by the Institute for Fiscal Studies.
Eligibility Criteria for the Christmas Bonus
To qualify for the Christmas bonus, individuals must be present or ‘ordinarily resident’ in the UK, Channel Islands, Isle of Man, or Gibraltar during the qualifying week. Notably, not all individuals over state pension age will receive the payment. The DWP has clarified that if a person has not claimed their state pension and does not qualify for other specified benefits, they will not be eligible for the Christmas bonus.
For couples, both partners can receive the £10 bonus if each meets the eligibility criteria. If one partner does not receive a qualifying benefit, they may still qualify under certain conditions: both partners must be over state pension age by the end of the qualifying week, and both must have been present in the eligible regions during the qualifying period.
The qualifying benefits for the Christmas bonus include:
– Adult Disability Payment (Scotland only)
– Armed Forces Independence Payment
– Attendance Allowance
– Carer’s Allowance
– Child Disability Payment (Scotland only)
– Disability Living Allowance
– Personal Independence Payment (PIP)
– Pension Credit – the guarantee element
– State Pension (including Graduated Retirement Benefit)
Payment Schedule and Changes
The DWP has announced adjustments to the payment schedule to accommodate the holiday season. Bonuses that would typically be paid on Christmas Day (December 25) or Boxing Day (December 26) will instead be issued on Christmas Eve (December 24). This change is designed to ensure recipients receive their payments in a timely manner, allowing for better financial planning during the festive period.
Final confirmation of the payment dates is expected from the DWP in December. As the holiday season approaches, many will be looking forward to this annual bonus, which, while modest in value, offers a measure of assistance to those in need during the festive season.
