How to get a universal credit budgeting advance

Are you claiming universal credit and need to cover an unexpected expense? Find out how you can get an interest-free budgeting advance.

What is a universal credit budgeting advance?

A universal credit budgeting advance is an interest-free loan designed to help universal credit claimants pay for one-off or unforeseen expenses. Learn about how much you can borrow, and compare your other options with our guide.

How does a budgeting advance loan work?

If you’re on universal credit or other benefits and need to cover a large upcoming expense, you can choose to receive some of your benefit upfront as a loan. The loan is then repaid over the next 12 months through your regular universal credit payments, which means you’ll receive a lower monthly payment until the loan amount has been paid off.

How much can I borrow?

The minimum amount you can claim on a budgeting advance loan is £100. The maximum amount depends on your personal circumstances and how much money you have in savings.

  • For singles without dependent children, it’s £348.
  • For couples without dependent children, it’s £464.
  • For those with dependent children, it’s £812.

However, if you have more than £1,000 in savings, the amount you can borrow will be the figure above, less whatever savings you have above £1,000. For example, if you’re a single person without any dependent children and you have £1,100 in savings, the maximum you can borrow is reduced to £248 (£348 minus £100).

How long does it take to get a budgeting advance?

When you apply for a universal credit budgeting advance, you should receive a decision on the same day. The budgeting advance should then be paid into your bank account within 3 days but can be transferred on the same day in the case of an emergency.

How to apply for a universal credit budgeting advance

You can apply for a universal credit budgeting advance online, by contacting your local Jobcentre Plus work coach or by calling one of the universal credit helplines below. You’ll need to prove you have a valid need for the loan and can pay it back.

Universal credit contact information

Universal Credit helpline

  • Telephone: 0800 328 5644
  • Textphone: 0800 328 1344
  • Relay UK (if you cannot hear or speak on the phone): call 18001 then 0800 328 5644
  • Welsh language: 0800 328 1744

Call centres are open Monday to Friday from 8am to 6pm.

Am I eligible for a universal credit budgeting advance?

The loan isn’t only available for universal credit claimants. You may be eligible for the loan if you’ve claimed any of the following benefits in the last 6 months:

  • Universal credit
  • Jobseeker’s allowance (income-based)
  • Employment and support allowance (income-related)
  • Income support
  • Pension credit

You must have earned less than £2,600 in the past 6 months (or £3,600 if you’re part of a couple) to be eligible for a loan.

However, you’ll likely be refused a budgeting advance if it appears that you may be unable to pay it back.

If you’ve claimed a budgeting advance in the past, you must have paid it back before you can claim another one.

If you’re struggling to meet essential expenses like rent or food while waiting for your first UC payment, you can ask for a universal credit advance instead. This is a different interest-free loan, although it’s also paid back via deductions from future UC payments.

What can I use a universal credit budgeting advance for?

A universal credit budgeting advance will only be approved if it’s being used for essential one-off expenses or charges, such as:

  • Essential household items such as cookers, fridges or beds
  • Unexpected bills or a fine
  • Rent in advance
  • Removal costs if moving home
  • One-off expenses required for your job, such as uniform or equipment
  • Home repairs or essential improvements

You’ll be asked what you’re planning to spend the money on. If you’re trying to claim a budgeting advance for ongoing costs (like food, travel or childcare) or one-off luxury purchases (like a new TV or event tickets), your claim will be denied.

How do I repay a universal credit budgeting advance?

Repayments are automatically deducted from future universal credit payments. These deductions are usually spread across your next 12 universal credit payments, and you can request that your payments not start for 3 months in exceptional circumstances.

If you no longer receive universal credit, you’ll still need to pay off the budgeting advance loan amount.

What are my other options?

If you’re struggling to afford rent, you could explore whether you’re eligible for a discretionary housing payment. This is another benefit available to those claiming housing benefits.

Benefit claimants are likely to have limited options when it comes to claiming loans. You may be eligible for a credit-builder credit card or a short-term loan, but these have higher interest rates attached to them and could cause more problems than they solve. Only apply if you can afford to make the repayments on time and don’t have better options.

If you’re in extreme financial hardship, you may be eligible for financial assistance from your local council.

If you’re really struggling for ideas to cover an unexpected expense, consider seeking debt advice from an independent body, such as the MoneyHelper.

The bottom line

A universal credit budgeting advance is a useful option that could get universal credit claimants out of a sticky financial situation. Although the loan is interest-free, it will reduce your benefits for the next 12 months, so it should only be claimed if you can get by with a reduced benefit payment.

Frequently asked questions

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Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio

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Chris has written 566 Finder guides across topics including:
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