Budgeting Loans and Budgeting Advances: interest-free help with one-off costs

Budgeting Loans and Universal Credit Budgeting Advances are interest-free sums for one-off costs, repaid from benefits. This guide explains who can get each, the amounts, how repayment works, and the grants available in Scotland.

Who this guide covers

This is general information for people in Great Britain who are on a low income and claim certain benefits. It is not advice on your own case. Two schemes are covered: the Budgeting Loan, which is for people on older benefits, and the Budgeting Advance, which is for people on Universal Credit. GOV.UK says a Budgeting Loan is not available to anyone currently getting Universal Credit, and that people in Northern Ireland use a different scheme, which is not covered here. Figures were checked on 20 October 2026 and apply in the 2026/27 tax year. Both schemes are borrowing, not gifts, so the money has to be paid back out of your benefit payments.

What the two schemes are for

A Budgeting Loan is a loan from the Department for Work and Pensions (DWP) that GOV.UK says can help with household items such as a washing machine, clothing, rent in advance, moving costs, home repairs, travel within the UK, the costs of starting a new job, maternity and funeral costs, and repaying hire purchase or loans taken out for those items. A Budgeting Advance is the Universal Credit equivalent. GOV.UK lists furniture, essential household and family items, some TVs, clothes or footwear, home repairs or security, funeral expenses and a rent deposit or removal costs. It says an advance cannot cover ongoing costs such as food, household bills, rent or paying off debts. Crisis Loans, which used to cover emergencies, are not available any more.

Who can apply

For a Budgeting Loan, GOV.UK says you must have been getting Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance or Pension Credit for the past 6 months. Time spent on Universal Credit counts towards the 6 months if you moved to Pension Credit. You cannot get a loan if you are on Universal Credit, New Style Jobseeker's Allowance or New Style Employment and Support Allowance, if you are taking part in industrial action, or if you owe more than £1,500 across Crisis Loans and Budgeting Loans. For a Budgeting Advance, GOV.UK says you must have received Universal Credit, Employment and Support Allowance or Pension Credit for 6 months or more, or need the money to start a new job or stay in work. You are not eligible if you earned more than £2,600 (£3,600 for couples) in the past 6 months, and you can only have one at a time.

How much you can borrow

The smallest amount is £100 for both schemes. The maximum depends on your household: up to £348 if you are single, £464 if you have a partner, and £812 if you have children. For a Budgeting Loan, GOV.UK ties the higher figure to you or your partner claiming Child Benefit, and for an advance it refers to having children. The amount you actually receive is not simply the maximum. GOV.UK says it depends on whether you can pay it back, on your savings, and on whether you are already repaying an earlier loan. Citizens Advice gives an example for advances: savings above £1,000 reduce the advance by the excess, so £1,250 in savings reduces it by £250. Savings are the money and capital you hold, so it can be worth checking how yours are counted.

Repayment: how it works

Repayments are taken automatically from your benefits, so you do not have to remember to pay. For a Budgeting Loan, GOV.UK says you usually repay within 2 years (104 weeks), the amount depends on your income and what you can afford, and you repay only what you borrow. For a Budgeting Advance, GOV.UK says repayments come from your Universal Credit payments, usually over 24 months starting with the next payment. Citizens Advice says the 24-month period applies to requests made on or after 4 December 2024, and that earlier ones were normally 12 months. If you cannot afford the repayments, GOV.UK says you can ask for them to be delayed. It gives up to 6 months on its Budgeting Advance page, and 3 months on its page about advances on a first payment, so it is worth asking what applies to your advance.

A worked example

These figures are invented for illustration. Suppose a single person with no children is offered the maximum £348 Budgeting Advance. Spread over 24 months, the repayment is £348 divided by 24 = £14.50 a month, so their Universal Credit is £14.50 lower for 24 months. Over the whole period they repay 24 x £14.50 = £348, exactly the sum borrowed. Now suppose they have £1,100 in savings, which is £100 above the £1,000 threshold. Using the Citizens Advice method, the advance falls by £100 to £248, and £248 divided by 24 = £10.33 a month (rounded). A household with children borrowing the full £812 would repay £812 divided by 24 = £33.83 a month, rounded to the nearest penny.

If you move off the benefit, and other support

You still owe the money if your claim ends. GOV.UK says that if you move to another benefit, deductions usually continue from it, and if you come off benefits DWP Debt Management writes to you, and you can pay in full or set up regular monthly payments. Other help exists too. GOV.UK's page on advances also lists an advance on your first payment, which is capped at your first estimated payment (£344 in its own example, repaid at £14.33 a month over 24 months), and help with upfront childcare costs. In Scotland the Scottish Welfare Fund offers a Crisis Grant and a Community Care Grant. mygov.scot says neither has to be paid back, and applications are made through your local council.

Common mistakes and where to get free help

• Assuming a Budgeting Loan is open to Universal Credit claimants: GOV.UK says it is not, and a Budgeting Advance is the route.
• Forgetting that repayments reduce each payment, so the benefit received will be lower for the whole repayment period.
• Applying for ongoing costs: food, bills and rent are not covered.
• Not checking whether a grant, rather than a loan, is available locally, for example in Scotland.

Free, impartial help with budgeting and debt is available from Citizens Advice, MoneyHelper and StepChange. They can help you check what else you may be entitled to and talk through whether borrowing from benefits suits your circumstances.

Check before you act

Amounts, eligibility rules and repayment terms are set by the DWP and can change, and two GOV.UK pages differ slightly on delay periods, so it can be worth confirming the details on the official pages linked below, or with a free adviser, before relying on this guide.

Sources

• GOV.UK, Budgeting Loans: overview
• GOV.UK, Budgeting Loans: eligibility
• GOV.UK, Budgeting Loans: what you'll get
• GOV.UK, Budgeting Loans: repayments
• GOV.UK, Universal Credit advance: unexpected costs
• GOV.UK, Universal Credit advance: first payment
• Citizens Advice, Getting a Universal Credit budgeting advance
• mygov.scot, Scottish Welfare Fund