Budgeting Loans and Budgeting Advances

Money Advice Service

If you’re already getting certain benefits and need a loan, see if you can apply for an interest-free Budgeting Loan from the Social Fund. This can be much cheaper than paying high interest charges for borrowing from payday or doorstep lenders. This page tells you how Budgeting Loans work and how to apply for them, including information about Budgeting Advances if you’re on Universal Credit.

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What is a Budgeting Loan?

A Budgeting Loan helps you pay for an essential or unexpected expense if you’re on a low income. It can be used for a wide range of things, including:

  • furniture or household equipment
  • clothing or footwear
  • advance rent or removal expenses for a new home
  • travelling expenses
  • things to help you look for or start work
  • improving, maintaining or securing your home
  • maternity or funeral expenses.

Other help with maternity expenses

If you’re expecting your first child or you’re expecting more than one baby and already have children, you might be able to claim a £500 SureStart maternity grant instead. You don’t have to pay this back.

Find out more about SureStart maternity grants in our guide Benefits and entitlements to claim when you’re having a baby.

Other help with funeral expenses

If you are 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 Payment.

Can I get a Budgeting Loan?

You can apply for a Budgeting Loan if you’re getting one of these benefits:

  • Pension Credit
  • Income Support
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance.

You must have been claiming for at least 26 weeks, either consecutively or with a break of no more than 28 days.

The minimum amount you can ask for is £100, but there are maximums based on your household circumstances:

  • £384 if you’re single
  • £464 if you’re part of a couple
  • £812 if you have children.

Some things affect the amount of loan you can ask for, like:

  • existing Social Fund loans
  • savings over £1,000 (or £2,000 if you’re 63 or over).

How to apply for a Budgeting Loan

You can apply online on the GOV.UK website. This option isn’t available in Northern Ireland.

You can also download, print and fill in Form SF500 from the GOV.UK website.

Or ask for the form at your local Jobcentre Plus (or Jobs and Benefits Office in Northern Ireland).

Paying back a Budgeting Loan

Loan repayments are interest-free and worked out at the time your loan is agreed.

Depending on the amount you borrow, you normally have to pay it back within two years.

Repayments are usually automatically taken out of your benefits.

If you stop getting benefits while you’re paying back the loan, you’ll need to agree another way to pay the money back.

If you have a loan but can no longer afford the agreed repayments, ask the office that paid you to work out another repayment plan. It’s important you don’t get into debt trying to pay off the loan.

What is a Budgeting Advance?

If you’re claiming Universal Credit you should claim a Budgeting Advance instead of a Budgeting Loan. This is the equivalent of a Budgeting Loan for people who are claiming Universal Credit.

To get a Budgeting Advance you must:

  • have been getting Universal Credit for at least six months – unless you need the money to help you get a job or keep an existing job
  • have earned less than £2,600 if you’re single (£3,600 if you’re in a couple) in the past six months
  • not be paying off another Budgeting Advance.

You will usually have to start paying back your Budgeting Advance out of your next Universal Credit payment and pay it back within 12 months.

Ask your work coach at your local Jobcentre Plus about how to claim a Budgeting Advance.

The minimum amount you can ask for is £100, but there are maximums based on your household circumstances:

  • £384 if you’re single
  • £464 if you’re part of a couple
  • £812 if you have children

Other help you can get

Local authorities in England and the devolved governments in Scotland, Wales and Northern Ireland can provide help and support in an emergency.

Help if you’re waiting for your first benefit payment

If you need money while you’re waiting for your first benefit payment or because you have had a significant change of circumstances, ask your Jobcentre Plus (Jobs and Benefits Offices in Northern Ireland) about a short-term benefit advance.

If you’re waiting for your first Universal Credit payment, you can ask for a Universal Credit Advance instead.

This article is provided by the Money Advice Service.

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When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

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Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
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We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

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