Budgeting Loan / Budgeting Advance

A budgeting loan or advance is a short term interest-free loan which is made available from the Social Fund. It can be used to pay for certain essential items but must be paid back in full. If you are in receipt of certain welfare benefits then you can apply for a budgeting loan (with those on Universal Credit being able to apply for an equivalent budgeting advance).

What is a Budgeting Advance?

A budgeting advance is a short term loan often used to pay for specific or unexpected expenses. However it can also be used to pay for essential items such as clothes. If you receive Universal Credit then you can apply for a budgeting advance. The amount will be repaid via deductions in your Universal Credit payments until the loan is repaid, normally over a period of 12 months.

There are certain criteria you need to meet in order to apply.

In the past six month you must…

  • Have been receiving UC
  • Have a total earned income below £2,600 (or £3,600 for couples)
  • Not already be repaying an existing budgeting advance

What can a budgeting loan be used to buy?

A budgeting loan can typically be used to pay for…

  • Clothing
  • Furniture
  • Rent in advance
  • Travel costs
  • Maternity Cost
  • Funeral Costs

You do not have to disclose specifically what the money is being used for although it must fall into one of these broad categories.

Before applying it is worth checking if you can get financial assistance that does not need to be repaid such as

Which benefits do I need to receive in order to get a budgeting loan?

You can only apply for a budgeting loan if you receive these benefits…

There is a minimum loan amount of £100 and you must have been receiving the above benefits for a minimum 26 weeks (with a break of no more than 28 days in between).

If you have existing loans from the social fund and/or you have more than £1,000 in savings (or £2,000 if you’re over 63) then you may be prevented from applying.

How do I apply?

You can either apply online or if you prefer you can print off an SF500 form and take it to your local JobCentre Plus. Alternatively you can apply over the phone:

Telephone: 0800 328 5644
Telephone (Welsh language): 0800 328 1744
Textphone: 0800 328 1344

It will take around six weeks for your application to be assessed.

How much will I get?

  • £348 if you’re single
  • £464 if you have a partner (with no children)
  • £812 if you have children

The minimum amount that you can be loaned is £100. If you have more thanb £1,000 in capital (such as savings) the JobCentre will reduce your advance amount accordingly, for example if you have £1,500 in savings they will reduce your advance by £500

How is the money repaid?

Repayments will be automatically deducted from your benefits. However, if you were to stop receiving benefits for any reason you will have to find another way to pay the money back.

A budgeting loan is normally paid back upto two years after you receive the money with no interest being applied. Budgeting advances should be paid back inside 12 months, although you may be able to extend this to 18 months in some cases.

What to do if you are waiting on your first benefit payment

Rather than get a loan, in these circumstances you may be able to get a short term benefit advance. Speak to your local JobCentre Plus to see what help is available.

What Emergency Support can I get?

In the first instance contact your local council, but also see our dedicated section of Emergency Support.