Budgeting loans

Budgeting loans are interest fee loans designed for people in receipt of certain benefits. They are administered by the DWP. A budgeting loan claim can be made for rent in advance or removal costs as well as furniture and household items.

This content applies to Scotland

Overview

A budgeting loan can help pay for: [1]

  • furniture or household items (for example, washing machines or other ‘white goods’)

  • clothes or footwear

  • rent in advance and or removal costs to secure fresh accommodation

  • maintenance, improvements or security for your home

  • travelling costs within the UK

  • costs linked to getting a new job

  • maternity costs

  • funeral costs

  • repaying hire purchase loans

  • repaying loans taken for the above items

Eligibility

To get a budgeting loan the applicant or their partner must have been getting one or more of these benefits for the past 26 weeks: [2]

  • Income Support

  • income-based Jobseeker’s Allowance

  • income-related Employment and Support Allowance

  • Pension Credit

People in receipt of universal credit are excluded from getting a budgeting loan but can request a ‘budgeting advance’ of their universal credit. See the Gov.uk pages on universal credit advances for details.

An applicant cannot get a budgeting loan if they: [3]

  • Are involved in industrial action (for example, a strike, walkout or lockout)

  • owe more than £1,500 in total for Crisis Loans and Budgeting Loans

Amounts and repayments

The lowest amount which can be borrowed is £100. The highest amount which can be borrowed is: [4]

  • £348 for single people

  • £464 for a couple

  • £812 for a household with children

The maximum an applicant can borrow also depends on: [5]

  • The ability to repay pay.

  • Any savings of more than £1,000 (£2,000 for people 61 or over) [6] ]

  • Any existing Budgeting Loan or Crisis Loan

A budgeting loan is interest free.

The repayments are taken automatically from the applicant’s benefit entitlement. The amount of the repayments are based on total benefits and affordability and the loan is expected to be repaid within 2 years (104 weeks).

Applications and decisions

Applications must be made in writing. An application can be made a local Jobcentre plus office or an application form can be downloaded online from Advice Gov - budgeting loans: claim form.

The initial decision may be made over the telephone however this should be followed by a decision in writing.

There is a right to request a review within 28 days of the date the decision was issued. [7] There is no right to review the decision relating to the repayment terms or recovery. However, where an applicant has accepted a loan and the repayment terms are causing hardship a request can be made to reschedule the loan and reduce the weekly repayment rate.

Last updated: 27 January 2020

Footnotes

  • [1]

    dir.2 DWP: Budgeting Loan guide for decision makers

  • [2]

    dir.8 DWP: Budgeting Loan guide for decision makers

  • [3]

    dir.8 DWP: Budgeting Loan guide for decision makers

  • [4]

    dir.53 DWP: Budgeting Loan guide for decision makers

  • [5]

    dir.53 DWP: Budgeting Loan guide for decision makers

  • [6]

    dir.9 DWP: Budgeting Loan guide for decision makers

  • [7]

    reg.2(1)(a) and (2)(a) Social Fund (Application for Review) Regulations 1988 SI 1988/34