Your advance payment can be as much as your estimated monthly universal credit payments. Image: Unsplash
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Universal credit is a lifeline for millions across the UK. But navigating it can be confusing at times, especially if you’re just getting started and need help quickly.
Around 6.7 million people – across 5.6 million households – were claiming universal credit in the first quarter of 2024, according to figures published by the government. And plenty of those people needed financial support right away when they applied, which is where the universal credit advance payment plays a crucial role.
The advance exists to help people who are entitled to the benefit but can’t afford to wait the typical five weeks it takes for the first payment to arrive, whether applying for benefits for the first time or being migrated to universal credit from so-called legacy benefits.
That waiting period can be especially difficult, leaving people without the cash to cover bills and daily essentials. The advance, in theory, bridges the gap for people who are struggling or who are at risk of falling into rent arrears or struggling to pay utility bills. It functions like an interest-free loan.
During October’s Autumn Budget, Chancellor Rachel Reeves announced a reduction in the maximum amount someone can repay towards benefit debt, which for many people means repayments to cover universal credit advance payments. This means that instead of paying up to 25% of what they received as an advance payment, a household will pay no more than 15%. The move will benefit 1.2 million families, Reeves said, adding roughly £420 to their annual incomes.
It was a positive step that didn’t go far enough, according to Mark Rowland, chief executive at the Mental Health Foundation.
“Debt and mental health can form a vicious cycle,” Rowland said, “with half of all adults with a debt problem also living with mental ill-health.
“Unaffordable benefits deductions can leave people struggling to afford the basics, leading to further problem debt and worsening mental health problems.”
The government-dubbed Fair Repayment Rate won’t deliver “the kind of transformative change we need to lift millions of children out of poverty,” he added, nor will it “guarantee everyone receiving benefits can afford the essentials like food and a warm home.
“Much more needs to be done to support people on lower incomes.”
How much is the universal credit advance payment?
The amount you can get as a universal credit advance payment depends on your personal circumstances and what the Department for Work and Pensions (DWP) estimates you’ll be paid each month on the benefit. This means your advance amount is based on what they decide your first monthly payment will be.
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If needed, you can ask for up to 100% of what you’re expected to get for your first payment, but you don’t have to ask for the maximum amount – it’s up to you.
If the DWP estimates your monthly payment will be £500, for example, you could request the full £500 as an advance. Some people decide to ask for a bit less to make repayment easier. The minimum you can request is £100, so even if you only need a small amount to get by or cover a one-off bill, you can’t ask for any less than that.
You can apply for a universal credit advance payment through your online account, by calling the helpline (0800 328 5644) or by speaking to your work coach at your first interview with them – you can’t request an advance online or by phone until you’ve completed this interview.
Once you’re approved for an advance, the money is paid out fairly quickly – usually within a few days – and goes directly into your bank, building society or credit union account. This quick turnaround can be a big relief for people who need immediate support. Tell the DWP if you need it sooner as it’s possible for them to pay it the same day a decision is made.
What is the maximum advance payment from universal credit?
There’s no cap on the amount you can receive as an advance payment, but it can’t be more than what the DWP would give you as one month’s universal credit. In other words, you can ask for up to 100% of your monthly payment, which differs on a case by case basis – a single person over the age of 25 could receive the standard rate of £393.45, for example, in which case you could receive up to but no more than that amount in the form of an advance payment.
The specific amount you’re eligible for depends on your circumstances. People with children or higher housing costs, or disabled people, might be paid more per month than others, so they can ask for more in a universal credit advance payment. People who expect to receive a lower amount per month can are limited to that amount when asking for an advance.
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At the time you apply for an advance, your application isn’t fully processed by the DWP yet – hence the usual five-week wait to be paid anything. They consider things like your income, how much you pay in rent if you need help with it, and other factors specific to you when putting together an estimate for your monthly payments. They then use this estimate to determine the maximum advance you’re eligible for. So if the DWP expects your monthly payment will be £700, then the most you can ask for as an advance payment is also £700.
It can be tempting to ask for the maximum amount, but remember that this money needs to be repaid. Repayment usually starts with your first universal credit payment and you’ll continue paying it off monthly until you’ve covered the full amount – meaning a smaller monthly income until the debt is cleared. If you can manage with a little less than the full amount, requesting only what you need could make repayment easier and minimise the impact on your budget in the long run.
You can ask for an advance even if you’ve been on universal credit for a while, but your circumstances have changed and you expect your monthly payments will go up. Maybe you’re waiting to start receiving the housing element of universal credit for the first time, which will push your payments up – the DWP will sometimes give out advances on those increased payments.
Repaying the advance payment
Repayment can be a major concern for people considering a universal credit advance payment. As mentioned, it usually starts once you start receiving your regular universal credit payments, with a portion of your payment deducted each month until the advance is fully repaid. The repayment terms are meant to be manageable, but some people struggle with the reduced monthly income, especially if they’re relying on universal credit to cover all their living costs.
The repayment period generally spans up to 24 months, but it can vary depending on your circumstances. The DWP will automatically take a set amount from your universal credit payment each month – if you took an advance of £500, and the DWP arranged a repayment of £25 per month, it would take 20 months to repay the full amount.
If you find yourself struggling with the repayment amount, you can sometimes ask for temporary adjustments like lowering the monthly repayments or pausing them for a while. That flexibility is limited, though, and you’ll eventually need to start making regular repayments again.
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The deductions system has long come under fire for driving low-income people deeper into poverty. Around 44% of people claiming universal credit faced monthly deductions from their income, according to 2022 research published by Lloyds Bank Foundation, at an average of £78 per month. Deductions can be taken for a variety of reasons – often to compensate for DWP overpayments too – but these are most commonly taken as repayment for a universal credit advance, and were “driving impoverishment and further debt, particularly hitting the most vulnerable,” the report said.
Can I get another advance payment on universal credit?
Circumstances change and unexpected costs can arise, meaning one advance payment might not be enough to cover the period before your regular universal credit payments kick in. It’s possible to ask for another advance payment in some cases, but the DWP considers each request individually and there’s no guarantee that a second advance payment will be approved.
The DWP looks at your specific situation to decide if a second advance is warranted, including why you need it and if you’ve already received the maximum amount allowed.
There are some restrictions on how many advance payments you can receive, and if you’re in a situation where you might need more than one, keep in mind that the DWP tries to limit these to prevent overwhelming people with repayments.
If you do find yourself in need of additional support, you might be able to access different support funds. Most local authorities operate a hardship fund and offer crisis grants, for example, or you might be entitled to a budgeting advance through universal credit if you need to cover a specific expense like uniform for a new job or broken white goods.
What to do if you’re refused an advance payment
Not everyone is automatically approved for a universal credit advance payment. So if your request for an advance is denied, you can take some steps to better understand why the decision was made and, in some cases, appeal it.
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The most common reason people are refused advances is that the DWP has had a look at someone’s circumstances and doesn’t think they meet the criteria for immediate need. If that’s you, and you don’t believe the DWP has fully understood your situation, it can help to gather proof of the hardship you’re facing (like recent bills or bank statements) and ask for a review. Get in touch with the DWP, usually through your online universal credit account, if you’re looking for extra context that could support your case.
If the request is still denied after a review, it might be time to look at other options. Councils’ hardship funds and grants are a good, often non-repayable, option, while organisations like Citizens Advice and StepChange can give you free, tailored advice on navigating costs or managing bills and debt until your universal credit payments start. Anti-poverty charity Turn2us offers an online tool for finding an adviser local to you.
