If you need to borrow money for essentials and receive certain benefits, a Budgeting Loan or Budgeting Advance from the government offers an interest-free option. This makes them much cheaper than alternatives, such as an overdraft or payday loans. Find out more, including how to apply.
What is a Budgeting Loan?
A Budgeting Loan (called a Budgeting Advance if you’re on Universal Credit) offers an interest-free way to borrow from £100 up to £812.
Repayments are usually taken automatically from future regular benefit payments. It’s designed to help you pay for essential or unexpected expenses, such as:
- furniture and household appliances
- clothing and footwear
- rental deposit and moving costs
- travelling costs
- equipment and tools to help you get or keep a job
- improving, maintaining or securing your home
- having a baby
- planning a funeral.
The smallest loan you can take is £100, with the maximum based on your living situation:
- £384 if you’re single
- £464 if you’re part of a couple
- £812 if you have children.
You could get less if you have savings over £1,000 or are paying back an existing Budgeting or Crisis Loan.
Paying back a Budgeting Loan or Advance
Repayments are worked out when you take out the loan. This amount is then usually taken out of your regular benefit payments until it’s repaid.
Depending on how much you borrow, you must usually pay it back within two years for a Budgeting Loan.
From December 2024, the repayment period on new Budgeting Advance loans will increase from 12 months to 24 months, making monthly payments lower.
If you are already paying back a Budgeting Advance or you took one out before December 2024, you will need to pay it back within one year.
If you stop getting benefits while you’re still making repayments, you’ll need to agree another way to pay the money back.
If you can no longer afford the repayments, ask for another repayment plan to be agreed. It’s important you don’t get into debt trying to pay off the loan.
Have you missed a payment?
Use our Debt advice locator tool to find free and confidential debt advice online, over the phone or near to where you live.
Who qualifies for a Budgeting Loan
You can apply for a Budgeting Loan if you’ve been claiming one of these benefits for at least six months:
- Pension Credit
- Income Support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance.
How to apply for a Budgeting Loan
If you live in England, Wales or Scotland, you can apply online at GOV.UKOpens in a new window You can also download, print and complete Form SF500 at GOV.UKOpens in a new window or pick one up from your local Jobcentre Plus.
If you live in Northern Ireland, you’ll need to complete Form SF500 at nidirectOpens in a new window or visit your local Jobs and Benefits office.
Who qualifies for a Budgeting Advance
You can apply for a Budgeting Advance if you:
- have been getting Universal Credit for at least six months – unless you need the money to help you get or keep a job
- have earned less than £2,600 (£3,600 if you’re in a couple) in the past six months
- are not already paying off another Budgeting Advance
How to apply for a Budgeting Advance
You’ll need to speak to an advisor to apply. Contact the Universal Credit helpline via your online account or ask your work coach at your local Jobcentre Plus.
Citizens Advice has more information about Budgeting AdvancesOpens in a new window
Other help available
Where to get help and support in an emergency depends on where you live:
- In England, contact your local council to find your local welfare assistance schemeOpens in a new window
- In Scotland, find out about the Scottish Welfare FundOpens in a new window on the Scottish Government website.
- In Wales, find out about the Discretionary Assistance FundOpens in a new window on the Welsh Government website.
- In Northern Ireland, find out about Discretionary SupportOpens in a new window at nidirect.
Help if you’re having a baby
If you’re pregnant with your first child, or already have children and are now expecting twins (or multiple births), you might be able to claim a £500 SureStart maternity grant. You don’t have to pay this back.
Find out more about this grant and other help that might be available in our guide What benefits can I claim when pregnant or have a baby?
Help with funeral costs
If you’re getting certain benefits and have to pay the funeral expenses of a relative or close friend, you might be able to apply for a Funeral Expenses PaymentOpens in a new window
If you’re struggling before your first benefit payment
If you’re waiting for your first payment and can’t afford to live, you can ask for an extra payment to be made early. This is called a short-term benefit advance.
Your regular benefits payments will then be reduced by a little each time until it’s repaid. You can ask for an advance on the following benefits:
- Universal Credit
- Carer’s Allowance
- Pension Credit
- State Pension
- Employment and Support Allowance
- Jobseeker’s Allowance.
You can apply for a Universal Credit advance via your online account. For the others, you’ll usually need to call to apply. See GOV.UKOpens in a new window if you live in England, Scotland or Wales, and nidirectOpens in a new window if you live in Northern Ireland for the number to call and opening hours.
