Budgeting advances from Universal Credit

Similar to the budgeting loans that were previously available from the social fund, budgeting advances are now available to Universal Credit recipients. There are restrictions on purposes as well as loan amounts.

Those receiving Universal Credit know what it is like to live on a fixed income and many people are on a low income. There is very little room for additional expenses in the budget. Many of the individuals should also seek counselling, as their is free budgeting advice for Universal Client clients to teach them how to spend their income efficiently.

When an unexpected expense arises, it can cause something to go unpaid. Unpaid bills result in late fees and can result in more serious consequences. Even those who have excellent discipline over their budgets can find themselves in hot water over unpaid bills when an emergency occurs. While some people turn to high street lenders to solve the cash crunch, a much cheaper (free) option is available through the government.

Budgeting advances are zero-interest loans that can be obtained to cover financial emergencies. The loan proceeds are deposited directly into a bank account. Applicants who cannot wait for a decision may be able to withdraw a short-term benefit advance without delay. The proceeds are easily repaid through deductions from Universal Credit payments.

These interest-free loans are available to households who earn less than the allowable cap (£2,600 for single applicants, £3,600 for couples). This ensures that only those applicants who qualify as lower-income households receive the limited funding.

Savings can also limit the available funds that can be tapped. Households with at least £1,000 in capital will see a reduction in the approved amount. The reduction is one pound for each pound over 1,000 that the person has access to. Someone with £1,400 in capital would have their potential budgeting advance reduced by 400 quid.

Anyone on Universal Credit has access to this benefit. The actual amount of the advance will depend on additional qualifications. Regardless, this zero-interest loan is always a better option than applying for credit through a high street lender charging sky-high interest rates.

To apply for a budgeting advance, applicants may contact their Jobcentre Plus office to begin the process. There is an opportunity to enquire about the limits prior to applying for the loan.