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How to budget on Universal Credit

Posted 26 November 2014

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Universal Credit is being rolled out to families in certain areas for the first time, so find out how you can plan your budget around it.

Universal Credit … the government’s new benefits system … is being rolled out to families for the first time.


Previously, Universal Credit had only been available for single people and couples, but it can now also be claimed by parents. It’s currently only available in the North West, but it will apparently be available in 100 Jobcentres by early next year. The rollout will start with new claimants, so if you’re currently receiving benefits you don’t need to worry yet, but you’ll move on to Universal Credit at some point between now and April 2017. When you move on to Universal Credit, you may have to change the way you budget, as some things will be a bit different.

What is Universal Credit?

You may be able to receive Universal Credit if you’re on a low income or currently out of work. It brings together six existing benefits: Jobseeker's Allowance, Housing Benefit, Working Tax Credit, Child Tax Credit, Employment and Support Allowance, and Income Support.

If you’re currently claiming any of these benefits, continue as normal, as you’ll be contacted when you can get Universal Credit. As the national rollout takes place, you’ll be moved on to Universal Credit, but you’ll still have to claim any other benefits you receive.

Making changes

The main difference with Universal Credit is that it will usually be paid monthly, as opposed to weekly like Housing Benefit or bi-weekly like Jobseeker’s Allowance. If your current budget is based on receiving benefits at these times, you may have to change it to fit one monthly payment. Even if you’re not being moved on to Universal Credit yet, it might be a good idea to set up a monthly budget now so that you’ll be able to handle it when it comes in. You might struggle to budget your money for longer, but you may find it easier if you plan in advance.


You’ll have to claim Universal Credit yourself using a computer. If you don’t have one, you’ll have to ask at your Jobcentre where you can get free access to one; usually at a nearby library. If your rent is covered by your Housing Benefit, you’ll also have to pay it yourself under Universal Credit, instead of having it paid directly to your landlord. This will mean another change to your budget, as you’ll be getting more in benefits, but you’ll have to set it aside.


If you and a partner register for Universal Credit together, the government will usually make one payment into one account. You may want to open a joint account together, depending on your partner’s finances. If you are unable to get accepted for a current account, you may want to consider a basic bank account or an account from an alternative provider.


It may be difficult to get used to receiving benefits together, especially if you’ve never managed finances together before, and you may have to make some changes. Make sure you budget enough for both of your monthly outgoings, including any debts you’re paying. A Budget Planner could help you work out how to manage your money better throughout the month.

Getting help

Any changes to your benefits can be difficult to cope with, especially if you’re also trying to manage debts. If you can’t cope with getting a monthly benefit payment, you might end up falling behind on your debt repayments, especially if you’re tempted to spend your benefits early.


If you’re struggling to manage your finances due to debts, you don’t have to put up with it alone. You could speak to one of our debt advisors who may be able to provide you with expert debt advice about what you should do next. Making the first step can be hard, but even just talking through your options with another person can be a weight off your shoulders.

by Emily Bancroft

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