BRITS on Universal Credit are set to receive a helping hand as they will soon have an additional year to repay emergency loans from the Government, thanks to plans expected to be announced in the upcoming Budget.
Budgeting advances explained
For those already receiving benefits, budgeting advances provide the opportunity to purchase essential items in emergencies, such as a new fridge or covering costs for a job interview. Individuals can apply for amounts starting from £100 and going up to £812 for households with children.
However, these loans are not free money, requiring individuals to repay them by having small amounts deducted from their future Universal Credit payments. This repayment process can be challenging, especially for those on tight budgets.
In the next Budget, Chancellor Jeremy Hunt is anticipated to announce an extension of the repayment period for these loans, doubling it from 12 months to 24 months. This move aims to make the repayment process more manageable for Universal Credit recipients.
How much can you get through a Budgeting Advance?
The minimum amount that can be borrowed through a Budgeting Advance is £100, with the maximum sum depending on individual needs and circumstances:
- Up to £348 for single individuals
- Up to £464 for couples
- Up to £812 for households with children
It's important to note that individuals will not be eligible to borrow money if they have a certain level of savings. Any savings exceeding £1,000 will result in a reduction of the loan amount by £1 for every additional £1 saved. In most cases, having savings is preferred over borrowing money.
Eligibility for a Budgeting Advance
To qualify for a Budgeting Advance, individuals must be on Universal Credit and meet specific criteria, including receiving means-tested Jobseeker's Allowance, Employment and Support Allowance, Income Support, or Pension Credit, according to Citizens Advice. Additionally, applicants must have been receiving benefits for at least six months, unless the loan is for work-related expenses like travel.
Applicants should also have earned less than £2,600 in the previous six months (or £3,600 if living with a partner) before applying. Those currently repaying a previous Budgeting Advance are not eligible for a new loan.
How to apply for a Budgeting Advance
If a Budgeting Advance is deemed the best option, individuals can apply by calling the Universal Credit helpline at 0800 328 5644. Calls are free from both landlines and mobile phones. Alternatively, applicants can reach out to their local Job Centre Plus or apply through their online Universal Credit account.
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