Budgeting Loan or Budgeting Advance: interest-free, and you are probably eligible for exactly one

There is interest-free money for a cooker, a bed, rent in advance or moving costs, and it comes under two different names. If you are on Universal Credit it is a Budgeting Advance. If you are on the older benefits it is a Budgeting Loan. You cannot have both, and applying for the wrong one is the most common way people conclude there is no help.

Which one is yours

Budgeting Loan — 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. If you currently get Universal Credit you cannot get a Budgeting Loan. If you moved from Universal Credit to Pension Credit, time on Universal Credit counts towards the 6 months.

Budgeting Advance — for people already on Universal Credit. You need to have been getting Universal Credit, ESA or Pension Credit for 6 months or more, or to need the money to start a new job or stay in work.

What you can get

The smallest amount is £100. The most is:

• £348 if you are single
• £464 if you have a partner
• £812 if you have children — on the Budgeting Loan this is where you or your partner claim Child Benefit

You only have to pay back the amount you borrow, and repayments come automatically out of your benefit. There is no interest, which makes this materially different from anything a doorstep or online lender will offer for the same cooker.

What it can and cannot cover

Furniture and household items, clothes or footwear, rent in advance, moving costs, home maintenance or security, travel within the UK, costs of taking a new job, maternity costs, funeral costs, and repaying hire purchase taken for those things.

A Budgeting Advance cannot be used for ongoing costs — food, gas or electricity bills, rent, or paying off debts.

Paying it back

A Budgeting Advance is usually repaid within 24 months, starting from your first payment. GOV.UK’s own example: a £344 advance repaid over 24 months is £14.33 a month, so a first payment of £344 arrives as £329.67.

Budgeting Loans are paid into the same account as your benefit. Northern Ireland has a different route.

Common questions

This guide is general information, not financial advice. Rules, rates and eligibility change and differ by country — always confirm the current details with the relevant official body before you act.

Keep going