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Budgeting Loans/Budgeting Advances

Key information

Budgeting Loans can help pay for essential items like furniture, household equipment or clothing. The money has to be paid back but it is interest-free.

Budgeting loans will be replaced by Budgeting Advances if you are claiming Universal Credit.

Budgeting Loans will continue to be available to those claiming the old benefits until all remaining claimants have moved to Universal Credit.

Before you apply for a Budgeting Loan/Advance, check whether you can apply for Local Welfare Provision, a Sure Start Maternity Grant or a Funeral Payment, that do not have to be paid back.

Applies to: England, Scotland, Wales, Northern Ireland

Age rules: No specific age rules

Taxable: No

Administered by: Department for Work and Pensions



You can read through this information sheet, or go directly to the sections you want to read by clicking on these links:

Who does it help?

Budgeting Loans and Budgeting Advances help people on a low income.

You can only get a Budgeting Advance if, on the day you apply, you are getting Universal Credit and have income below a maximum threshold which is yet to be set.

You can only get a Budgeting Loan if, on the day you apply, you are getting:

You must have been receiving one of the qualifying benefits, or have been the partner of someone receiving one of the qualifying benefits, for at least 26 weeks (breaks of not more than 28 days are ignored).

In the case of Universal Credit, time spent on one of the income-related benefits immediately before moving to Universal Credit will count towards the 26 weeks. Also, to maintain work incentives, the 26 week requirement does not apply if the expense for which a Budgeting Advance is required is necessary for getting or keeping employment.

You cannot get a full Budgeting Loan if you or your partner have more than £1,000 in savings. This amount is £2,000 if you or your partner is over state pension age. For Budgeting Advances the savings limits are yet to be set.

A decision is made on whether you can have a loan/advance by looking at:

  • Your circumstances, and
  • Any existing Budgeting Loan/Advance you owe, and
  • Your savings, and
  • Your ability to pay back the loan/advance.

You will not be eligible for a Budgeting Advance if you have an earlier Budgeting Loan or Budgeting Advance that has not been fully repaid.

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What help does it provide?

A Budgeting Loan is only for certain essential items or services. You can apply for help with the following categories of expenses:

  • Furniture and household equipment, clothing and footwear
  • Rent in advance and/or removal expenses to new accommodation
  • The costs of improvement, maintenance and security of your home
  • Essential travelling expenses and expenses due to you getting or starting a job
  • Maternity or funeral expenses
  • Hire purchase payments and other debts, but only if the money was borrowed for expenses in any of the other categories.

The money will be paid into your bank or building society account. In some cases it can be paid at a post office.

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How much does it pay?

There are three rates of loan/advance, depending on whether you are single, a couple without children or a one or two parent family with children.

The minimum amount of Budgeting Loan that you can get is £100 and the maximum amount is £1,500. You cannot get more than they think you can pay back.

The amounts for Budgeting Advances are yet to be set.

If you are given a Budgeting Loan/Advance, it has to be paid back but you do not have to pay interest on the loan. 

A Budgeting Loan should normally be repaid within two years.

A Budgeting Advance should normally be repaid within one year, extendable to 18 months in exceptional circumstances.

A Budgeting Loan/Advance does not count as income and will not affect other benefits you get.

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How do I make a claim?

Contact your local Jobcentre Plus Office (link opens in a new window) for a claim form

Download a claim form from the Department for Work and Pensions website (link opens in a new window)

In Northern Ireland

Contact your local Social Security/Jobs and Benefits Office (link opens in a new window) for a claim form

Download a claim form from the NI Direct website (link opens in a new window)

You do not have to say exactly what you need or why. However, you must say the category of the expenses for which you want a loan/advance and the amount of money you need. 

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What documents will I need?

You have to give your national insurance number.

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Challenging decisions

If you disagree with the decision made on your application you can request a review by writing to Jobcentre Plus within 28 days of the decision. You will need to explain why you think the decision is wrong.

If you still think the decision is wrong after the review, you can ask the office of the Independent case Examiner to review the decision. This review should take no longer than 21 working days.

You may want to get help from an adviser if challenging a decision. you can use our Find an Adviser tool to locate one in your area.

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Last updated: 1 April 2013

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