Many families on Universal Credit are struggling to pay their bills and cover emergency costs. But what most people don’t know is that they could be eligible for an interest-free loan from the Department for Work and Pensions (DWP). This one-off payment, known as a Budgeting Advance, can be a big help during tough times.
What Is a Budgeting Advance?
A Budgeting Advance is a loan from the DWP that helps people on Universal Credit pay for essential or unexpected costs. This could include things like replacing a broken fridge, paying for travel to a job interview, or covering emergency bills.
The best part? It’s interest-free, which means you’ll only repay the amount you borrow — no extra charges.
How Much Can You Borrow?
The amount you can borrow depends on your personal situation. Here’s a quick look at what you could get:
If you’re single, you could get up to £348
If you have a partner, you could get up to £464
If you or your partner claim Child Benefit, you could get up to £812
The minimum amount you can borrow is £100.
Who Can Get a Budgeting Advance?
To get this loan, you must:
Be getting Universal Credit
Have been on Universal Credit, Income Support, Jobseeker’s Allowance, or Employment and Support Allowance for at least 6 months
Have earned less than £2,600 in the past 6 months (or £3,600 for couples)
Not have outstanding Budgeting Advance debts
Have less than £1,000 in savings (or £2,000 if you or your partner are over 63)
How Do You Apply?
It’s easiest to apply online, but you can also use a paper form if needed. If you want the loan to be paid into a different bank account, change your benefit payment account before applying.
After you apply, the DWP will send you a text, email, or letter to let you know if you’ve been approved. This message will also show how much your weekly repayments will be.
How Do Repayments Work?
Repayments are automatically taken out of your benefit payments. The amount is based on what you can afford and your total income, including other benefits.
You usually have to pay the full loan back within 2 years (104 weeks).
Important Note for Universal Credit Claimants
If you get Universal Credit, you cannot apply for a Budgeting Loan. Instead, you must apply for a Budgeting Advance — they work in a similar way, but are for people on Universal Credit only.
If you’re receiving Universal Credit and struggling with sudden costs, a Budgeting Advance could offer the financial help you need—without charging you any interest. The DWP offers this one-off loan to help families cope with unexpected bills or emergencies. Many people don’t know they can apply for up to £812, especially if they receive Child Benefit. With quick online applications and flexible repayments, it’s a helpful option worth exploring.
FAQs
What is a Budgeting Advance for Universal Credit?
A Budgeting Advance is an interest-free loan from the DWP for people on Universal Credit who need help with essential or emergency costs such as buying household items, repairing vehicles, or covering travel expenses.
How much can I borrow with a Budgeting Advance?
You can borrow between £100 and £812 depending on your circumstances. If you’re single, you may get up to £348; with a partner, up to £464; and if you or your partner receive Child Benefit, up to £812.
Who can apply for a Budgeting Advance?
To apply, you must be on Universal Credit for at least 6 months, have earned less than £2,600 (£3,600 for couples), have low savings, and not be paying off another Budgeting Advance.
How do I repay the Budgeting Advance loan?
The loan is repaid through automatic deductions from your Universal Credit payments. You normally need to repay it within 104 weeks (2 years), and the amount depends on your income and what you can afford.
Can I apply for a Budgeting Loan instead of a Budgeting Advance?
No. Budgeting Loans are for people on legacy benefits like Income Support or ESA. If you’re on Universal Credit, you must apply for a Budgeting Advance instead.
