What is a Budgeting Advance?

What a Budgeting Advance is

A Budgeting Advance is a loan from the Department for Work and Pensions (DWP) if you get Universal Credit. It helps with an unexpected or one-off cost that you cannot pay from your normal monthly payment. You pay it back out of your future Universal Credit payments.

It is different from an advance on your first payment, which helps while you wait for your first Universal Credit payment.

Who it is for

You may be able to get a Budgeting Advance if either:

• you have been getting Universal Credit, Employment and Support Allowance or Pension Credit for 6 months or more, or
• you need the money to help you start a new job or stay in work

You cannot get one if:

• you earned more than £2,600 in the past 6 months (£3,600 together for a couple), or
• you have not paid off an earlier Budgeting Advance. You can only have one at a time.

How much you can get

The least you can borrow is £100.

What you can use it for

• furniture
• household items such as a cooker, washing machine or vacuum cleaner
• essential items for your family
• clothes or shoes
• repairs or security for your home
• funeral costs
• a rent deposit or removal costs

You cannot use it for ongoing costs such as food, household bills or rent, or for paying off debts.

How to apply

1. Sign in to your Universal Credit account and ask through your journal, or
2. speak to your work coach or Universal Credit contact at your jobcentre, or
3. call the Universal Credit helpline on 0800 328 5644.

Explain what the money is for and how much you need.

Paying it back

You usually pay it back over 24 months. Repayments start from your next Universal Credit payment and are taken off automatically, so your monthly payment will be lower until the loan is paid off.

Example

Jo is single and borrows £348 for a new cooker. If it is paid back in equal amounts over 24 months, that is £14.50 a month taken from her Universal Credit.

Things to know

• Think about whether you can afford lower payments for 2 years before you borrow.
• If you are struggling with debts, free money and debt advice is available. Citizens Advice can help.

If you live in Northern Ireland

Budgeting Advances work in a similar way, with the same earnings limits and loan amounts. But you usually have up to 12 months to pay it back, and your savings can affect how much you get. You apply through your online account or your work coach.

Related guides

• Can I get a Universal Credit advance?
• Can I get a Budgeting Loan?
• Is the Household Support Fund still running?
• When will I get my Universal Credit payment?
• What is Universal Credit?

Where this comes from

• Get an advance for unexpected costs, GOV.UK
• Universal Credit advances and hardship payments, GOV.UK
• Universal Credit: advance payments, nidirect