BUDGET BONUS
Major Universal Credit boost as hard-up households given extra YEAR to repay money, Spring Budget confirms
How to check if you're eligible for a Budgeting Advancement
HOUSEHOLDS on Universal Credit will get an extra year to repay emergency loans from the Government under plans announced in today's Spring Budget.
Chancellor Jeremy Hunt confirmed today that he is doubling the repayment period for Budgeting Advances from 12 months to 24 months, as revealed by The Sun earlier this week.
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Budgeting Advances help those already receiving benefits to cover one-off emergency purchases, such as a trip to a job interview.
Brits can apply for loans from as little as £100 up to £812 if they're in a household with children.
It is not free cash, as people have to pay it back through small amounts taken from their future Universal Credit payments.
Speaking in Parliament today, the Chancellor said: "Nearly one million households on Universal Credit take out budgeting advance loans to pay for more expensive emergencies like boiler repairs or help getting a job.
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Spring Budget at a glance
- Fuel duty will be frozen and the 5p cut extended for a year
- Alcohol duty will be frozen until February next year
- National insurance was cut by an additional 2p
- An extension of the Household Support Fund for the fifth time
- Households on Universal Credit will get an extra year to repay emergency loans from the Government
- A new tax on vapes, which will cause prices to rise
- A one-off new tax on fags to ensure they are more expensive than the electronic alternative
- The high income child benefit charge was raised from £50,000 to £60,000
"To help make such loans more affordable, I have today decided to increase the repayment period for new loans from 12 months to 24 months."
Consumer champion Martin Lewis posted on X (formerly Twitter), that this is a "welcome move" that "lessens the burden on some of the payback of lowest incomes."
The Chancellor also announced abolishing the £90 charge for getting a debt relief order.
A debt relief order is a quick alternative to declaring bankruptcy in England and Wales, allowing people to get their debts written off if they can't afford to repay them.
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"For some people, the best way to resolve debts is through a debt relief order, but getting one costs £90 which can deter the very people who need them the most," he said.
"So having listened carefully to representations from Citizens Advice, I today relieve pressure on around 40,000 families every year by abolishing that £90 charge completely."
Budget highlights: Brits boosted by £450 tax cut & child benefit overhaul as Hunt freezes alcohol and fuel duties in giveaway Budget
Martin Lewis says the fee acts as a "barrier to people who needed help getting help" and he is "very pleased to see the charge gone".
The government is also raising the maximum debt value threshold from £30,000 to £50,000 and increasing the maximum value of motor vehicle that an individual can retain from £2,000 to £4,000, from 28 June 2024.
Who is eligible for a Budgeting Advance?
You can apply for the Budgeting Advance if you're on Universal Credit, as well as several other benefits, according to Citizens Advice.
These include:
- Means-tested Jobseeker's Allowance
- Means-tested Employment and Support Allowance
- Income Support
- Pension Credit
You'll need to have been claiming benefits for at least six months to apply for the loan, unless it's to cover costs associated with getting work or staying in work, such as travel costs.
You'll also need to have earned less than £2,600 in the previous six months before your application, or £3,600 if you live with a partner.
You also can't apply if you've previously taken out a Budgeting Advance loan and are still paying it off.
How much can you get through a Budgeting Advance?
You can borrow a minimum of £100 through the Budgeting Advance, while the maximum amount depends on your needs and circumstances.
You can get:
- Up to £348 if you’re single
- Up to £464 if you’re part of a couple
- Up to £812 if you have children
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However, you won't be able to borrow the money if you have a certain amount of savings.
For every pound of savings you have over £1,000, your loan will be reduced by £1.
Universal Credit
Here's everything to know about Universal Credit:
- What is Universal Credit? Everything you need to know including how to apply
- Universal Credit calculator: How much can I claim and how do I apply?
- Universal Credit login: How do I sign in to my online account?
- How much can I earn before Universal Credit is reduced and do I get a work allowance?
- What is a Universal Credit advance payment? How to apply and pay it back
- Are Universal Credit payments going up and how much more will I get?
- How to claim Universal Credit if you’re self-employed
- How many hours can I work on Universal Credit and will my payment be reduced?
- What is a Universal Credit budgeting advance and how much could I get?
- What is the Universal Credit housing element and how much of your rent does it pay?