HELPING HAND
HARD-UP households on Universal Credit can get an emergency cash boost to help cover the cost of essentials.
The money comes in the form of a budgeting advance, which might help families with high energy bills and inflation.
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The budgeting advance should not be confused with an advance payment, which is a loan to help you through the five-week wait for your first Universal Credit payment.
Here is everything you need to know about the loans, who's eligible, what you can get and more.
What is the Universal Credit budgeting advance?
The budgeting advance is an interest-free loan that can be used to cover certain expenses like household furniture, equipment, and clothing.
Of course, it is a loan, which means you have to pay it back.
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Make sure not to confuse the budgeting advance with an advance payment.
An advance payment is a loan to help through the five-week wait for your first Universal Credit payment.
Who's eligible for the Universal Credit budgeting advance?
To get a budgeting advance, you must have:
- Received Universal Credit, Employment and Support Allowance, Income Support, Jobseeker’s Allowance or State Pension Credit for six months or more, unless you need the money to help you start a new job or keep an existing job
- Earned less than £2,600 (£3,600 jointly for couples) in the past six months
- Paid off any previous budgeting advances
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The amount you can get depends on whether you can pay it back and whether you have any savings over £1,000.
Your first £1,000 of savings will be ignored, but the loan amount you are offered will be reduced by £1 for every £1 you have over that.
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?
How much can I get?
The maximum you can get for a budgeting advance is £348 if you're single with no children.
This goes up to £464 if you are a couple with no children.
If you do have children, you can get up to £812 as a loan, if you or your partner claim Child Benefit.
The lowest amount you can get for a budgeting advance is £100.
If you have savings of more than £1,000, the amount you can borrow will be reduced in line with anything over this threshold.
For example, a single person with £1,001 in savings will have £1 taken off their maximum loan amount, leaving them able to borrow up to £347.
What can I use the budgeting advance for?
You can apply for a budgeting advance to cover things like:
- A one-off item - for example, replacing a broken fridge
- Work-related expenses - for example, buying uniforms or tools
- Unexpected expenses
- Repairs to your home
- Travel expenses
- Maternity expenses
- Funeral expenses
- Moving costs or rent deposit
- Essential items, like clothes
When do I pay the budgeting advance back?
Claimants who have taken out a budgeting advance loan currently have to pay it back within the first 12 months of getting it.
The Department for Work and Pensions (DWP) deduct an amount from your Universal Credit payment every month, starting with your first one.
You can work out how much will be deducted from your payment every month by dividing the full cost of the loan by 12.
For example, if you borrowed £812 you will see roughly £68 taken off your Universal Credit payment every month.
If you stop getting Universal Credit, you'll have to agree another way to repay the loan.
For new loans taken out from December 2024, the repayment period will double to 24 months.
The move, which was announced by Chancellor Jeremy Hunt in the 2024 Spring Budget, will relieve pressure on households by reducing the monthly payments.
How to apply for a budgeting advance
You can apply for a budgeting advance by calling the Universal Credit helpline on 0800 328 5644, or 0800 012 1888 if you'd like to speak in Welsh.
An advisor will then asses you can pay the loan back - they'll see if you have any debts and how much you owe to help work this out.
The phone lines are open Monday to Friday, 8am to 6pm, and you'll normally get a decision on the same day.
Alternatively, you can apply through your online account or speak to your Jobcentre Plus work coach.
What can I do if my budgeting advance application gets rejected?
If your application is rejected, you can't appeal but you can ask for the decision to be looked at again.
It will help if you can give new evidence or show that your circumstances have changed since your first request.
If you're still rejected, you may be able to apply for help from the Flexible Support Fund.
The money can be used to help cover the costs of things such as childcare, uniforms, or work tools as long as they help you get a job.
This is only supposed to be issued as a last resort if all other options have been exhausted.
Alternatively, it might also be worth seeing if you can get a grant to buy any white goods that have broken.
Turn2Us has a free grants search tool so you can find out what national and local charities are offering.
You’ll need to search for what’s available specifically in your area by entering your postcode.
Find out more about what Universal Credit is and whether you might be eligible for a claim.
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