Budgeting Advance repayment period extended to 24 months

The repayment period for Budgeting Advance loans taken out from December 2024 onwards will increase from 12 months to 24 months, according to the March 2024 Budget¹. The change was set out in the Budget and applies to advances requested on or after 4 December 2024¹.

Budgeting Advances are loans available to people who receive Universal Credit and need help to pay for emergency household costs, such as buying a new cooker, or help to get a job or stay in work¹. Repayments are made through reduced Universal Credit payments until the amount borrowed is paid off². Citizens Advice states that this will normally be over 24 months for advances requested on or after 4 December 2024, and normally over 12 months for advances requested before that date².

The amount someone can borrow depends on their circumstances. The smallest Budgeting Advance is £100, and the maximum is £348 for a single person without children, £464 for a couple without children, and £812 for someone responsible for any children or qualifying young people². A qualifying young person counts as such up to 31 August after their 19th birthday if they are in non-advanced education, for example school or college².

Applicants must have earned less than £2,600 in the six months before applying, or £3,600 if they live with a partner². Unless the money is needed to help get or stay in work, they must have claimed Universal Credit, income-related Employment and Support Allowance or Pension Credit for six months or more². A Budgeting Advance cannot be taken out if the claimant or their partner is still paying off a previous one². Where someone has more than £1,000 in capital, the Jobcentre reduces the advance by the excess amount².

Applications are made by phone, and a decision is normally given the same day². There is no right of appeal if an application is rejected, but the decision can be asked to be looked at again².

Why it matters for households

The change affects people on Universal Credit who take out a Budgeting Advance on or after 4 December 2024. Because repayments are deducted from Universal Credit, spreading them over 24 months rather than 12 reduces the monthly deduction for the same amount borrowed, but the debt runs for twice as long. Advances requested before 4 December 2024 continue to be repaid over 12 months².

The Budget also set out other changes taking effect around the same period, including the removal of the extra standing charges paid by prepayment meter users from 1 April 2024, and a six-month extension of the Household Support Fund, with an extra £500 million split between councils around the UK for April to September 2024¹.

What happens next

The 24-month repayment period applies to Budgeting Advances requested on or after 4 December 2024¹. No further changes to the repayment period have been reported.