Budgeting loans

Budgeting loans are interest-free loans available only to people claiming certain benefits.

What is a budgeting loan?

A budgeting loan is a one-off payment from the social fund, a cash-limited fund of money provided by the UK Government. Each area has a limited amount of money available for the social fund.

Once the budget is spent, no more grants or loans can be paid.

Budgeting loans are intended to help people who claim benefits to pay for large costs which would otherwise be unaffordable.

You don’t pay any interest on budgeting loans, so they can be a useful alternative to other types of borrowing.

What can you use a budgeting loan for?

You may be able to get a loan to pay for housing-related costs such as:

  • rent or rent in advance
  • furniture and household equipment
  • removal expenses when you move home
  • essential home improvements, maintenance or security

You can also apply for a budgeting loan for other items such as clothes and shoes, maternity costs and funeral costs.

If you have hire purchase or other loans taken out for any of these purposes, budgeting loans can also be used to repay these loans. This includes repaying expensive payday loans.

Who can apply for a budgeting loan?

To get a budgeting loan, you or your partner must have been claiming any of these benefits for the past 6 months:

  • income support
  • income-based jobseeker’s allowance
  • income related employment and support allowance
  • pension credit

Your chances of getting a loan and how much you might get will depend on your personal circumstances.

The minimum amount you can apply for is £100. The maximum amount you can get is:

  • £348 if you’re single
  • £464 if you have a partner but no children
  • £812 if you or your partner claim Child Benefit.

You won’t be given a budgeting loan if you are not able to repay it.

Budgeting advances if you claim universal credit

If you claim universal credit, you will only be able to apply for a budgeting advance if you have been receiving universal credit, employment and support allowance (ESA), income support, jobseeker’s allowance (JSA) or state pension credit for 6 months or more.

Otherwise, you can apply for a universal credit advance, ie: an advance payment whilst you are waiting for your first payment of universal credit. For more information on advances whilst on universal credit see here, or contact your local Jobcentre Plus office

How to apply for a budgeting loan

You can apply at your local Jobcentre Plus office, either in person or by telephone.

Claim forms are also available online from Gov.uk.

Paying back a budgeting loan

You must pay back what you borrow within 2 years.

A fixed amount is taken out of your benefits until the loan has been repaid.

Ask for a review if a budgeting loan is refused

You can ask the social fund decision maker to review their decision if your application for a budgeting loan is refused.

To do this, you must:

  • apply in writing
  • apply within 28 days of the date the decision was given
  • explain clearly the reasons why you think the decision was unfair.

Ask the Independent Review Service to look at your application again if the decision is not reviewed in your favour. The IRS can change the decision if it was wrong.

Get advice immediately if you are not happy with any decision made on your application and you want to ask for a review.

Alternatives to budgeting loans

There may be other sources of help you could try if you need money in a hurry.

Phone an adviser

If you have a housing problem, call our expert housing advice helpline
0345 075 5005

Email an adviser

If you have a non-urgent problem and would like to speak to an advisor
email us

This page was last updated on: June 11, 2018

Shelter Cymru acknowledges the support of Shelter in allowing us to adapt their content. The information contained on this site is updated and maintained by Shelter Cymru and only gives general guidance on the law in Wales. It should not be regarded or relied upon as a complete or authoritative statement of the law.