Universal Credit claimants see major change in advance loans - Martin lewis praises move
The smallest budgeting advance you can borrow is £100
Universal Credit claimants will now have more time to pay back a budgeting advance loan, according to plans announced in the Budget today. A budgeting advance can be used for certain expenses such as emergency household costs, rent in advance or a deposit for moving home, travel costs for starting a new job, or funeral costs.
However, since this is a loan, it needs to be paid back. Usually, your Universal Credit payments are reduced until you've repaid the amount you borrowed.
Currently, you have 12 months to repay a budgeting advance, but it was confirmed today that this will increase to 24 months.
The minimum budgeting advance you can borrow is £100, but you may be able to get up to £348 if you're single, £464 if you're part of a couple, or £812 if you have children. You won't receive these full amounts if you or your partner have savings over £1,000, reports the Mirror.
The loan amount you could be offered will be reduced by £1 for every £1 you have in savings over the £1,000 threshold. To qualify for a budgeting advance, you must have been receiving Universal Credit, Income-related Employment and Support Allowance, Income Support, Income- related Jobseeker's Allowance or Pension Credit for six months or more.
Heralding the move, Martin Lewis wrote on X: "This is a welcome move. It lessens the burden on some of the payback of lowest incomes. Some saying 'it just extends the debt'. It does of course. Yet this is an interest free emergency loan.
"The repayments are auto taken from UC payments. Many complain it doesn't leave enough to live on, so the ability to spread it longer means more disposible income. And if people want to repay quicker they can. So I am supportive of this move. I suspect many benefits advisors will be too."
If you've been claiming benefits for less than six months and need money to help you start a new job or keep an existing one, you can still get a budgeting advance. To apply for a budgeting advance, you'll need to contact your local Jobcentre.
