Universal credit: Budgeting advances and loans

If you’ve applied for universal credit and you need money while you wait for your first payment, you may be able to get a universal credit advance.

If you’re already getting universal credit and you need money to pay for certain one-of costs, you might be able to get a budgeting advance.

Find out everything you need to know about universal credit advances and budgeting advances, including how to apply, what you’ll get and how they’re paid back.

What is a universal credit advance?

When you apply for universal credit, it usually takes about five weeks after submitting your claim before you get your first payment.

If you’re struggling to make ends meet during this time, you may be able to get a universal credit advance.

You’ll need to repay this advance.

Who can get a universal credit advance?

You can apply for a universal credit advance if you’re in financial difficulty – e.g. you can’t afford to buy food or pay rent - and:

you’re waiting for your first payment; or
you’re waiting for an increase in payments as the result of a change in circumstances

How much is a universal credit advance?

You could get up to 100% of your estimated monthly universal credit payment.

graphic of woman on laptop surrounded by coins

How do I apply for a universal credit advance?

You can apply for a universal credit advance:

through your online account
by speaking to your Jobcentre Plus work coach
by calling the universal credit helpline

You’ll usually get a decision on your application on the same day.

When will I get my universal credit advance?

Once it’s agreed, you’ll usually get the money in three working days. You may be able to get it on the same day if you have no other money to live on. Tell the Department for Work and Pensions (DWP) if this is the case.

The money will be transferred into the same bank account your universal credit is due to be paid into.

How will I repay my universal credit advance?

Deductions will be made automatically from your universal credit payments, starting with the first one.

If you stop receiving universal credit, you’ll have to make the repayments by another means e.g. from your wages or other benefits.

If you applied for an advance on or after 12 April 2021 while waiting for the first payment of a new claim, you’ll usually have to repay the money within 24 months.

If you applied for an advance before 12 April 2021 while waiting for the first payment of a new claim, you’ll usually have to repay the money within 12 months.

If you applied for an advance because of a change in circumstances, you’ll usually have to repay the money within six months.

In exceptional circumstances, you may be allowed to delay making repayments.

Repayments can be delayed for:

three months for a new claim
one month for a change in circumstances

What is a budgeting advance?

If you’re already getting universal credit (or certain other benefits) and you need help covering certain one-off costs, you may be able to get a budgeting advance.

Budgeting advances can be used to cover the cost of:

emergency household expenses e.g. replacing a broken cooker
getting or keeping a job
funeral costs

Who can get a budgeting advance?

To get a budgeting advance, you must have:

been getting universal credit, income-based jobseeker’s allowance, income-related employment and support allowance, income support or state pension credit for at least six months (unless the money is to help you start or keep a job)
earned less than £2,600 (£3,600 in total for couples) over the past six months
paid off any previous budgeting advances

How much is a budgeting advance?

You can get a budgeting advance of between:

£100 - £348 if you’re single
£100 - £464 if you’re in a couple
£100 - £812 if you have children

The amount you can get will depend on:

the repayments you can afford to make
any savings you have (the amount offered will go down by £1 for every £1 in savings you have over £1,000)

How do I apply for a budgeting advance?

Get in touch with your local Jobcentre Plus work coach to apply for a budgeting advance.

You’ll normally get a decision on the same day.

How is a budgeting advance paid back?

Deductions will be made automatically from your universal credit payments. The first deduction will be made from the next payment you receive after getting the advance.

You’ll have to repay the advance within 12 months.

If you move from universal credit to another benefit, the deductions will usually be made from your new benefit.

If you stop receiving benefits, you’ll get a letter telling you how much you owe and how to make arrangement to pay.

FAQs

A budgeting loan is very similar to a budgeting advance but it’s not available to people currently claiming universal credit.

To get a budgeting loan, you must have been getting at least one of the following benefits for the past six months:

· income support
· income-related employment and support allowance
· income-based jobseeker’s allowance
· pension credit

If you’ve recently moved from universal credit to pension credit, any time spent claiming universal credit will count towards the six months.

Yes, providing you’ve paid off any previous budgeting advances, you can apply for another one. Your application will be considered based on the usual criteria.

You can apply for a universal credit advance or budgeting advance after the date your insolvency order begins. If granted, you’ll have to pay this back in the usual way.

Any advances taken before the start of an insolvency order will be suspended until the end of the insolvency order and then written off.

You could be refused an advance if:

you haven’t had your identity confirmed at the Jobcentre
it’s decided you have enough money to last until your first payment of universal credit
you live with family or friends
you have previous earnings, redundancy or savings you could live on
it’s decided you won’t be able to afford to pay the advance back – they’ll see if you have any debts and how much you owe to work this out