Universal Credit is still a relatively new benefit system and you can sometimes receive money in advance. Quick Loans Express explains all you need to know about universal credit and how benefiting from the benefit will save you from taking a payday loan.

In this article, we’ll be looking at Universal Credit, and you’ll be able to read about:

Story Highlights:

  • What is Universal Credit?
  • Am I entitled to Universal Credit?
  • How to apply for Universal Credit
  • Advance payments for Universal Credit – their availability; who’s eligible; numbers applying & speed of payment
  • Repayments of Universal Credit advances
  • Reactions to news of easier access to Universal Credit advance payments
  • Conclusion

What is Universal Credit?

Universal Credit is a government payment which helps with living costs. The money is paid monthly into your bank account. If you are already on benefits, Universal Credit will replace any of these benefits:

  • Housing Benefit
  • Child Tax Credit
  • Income Support
  • Income-related Employment and Support Allowance (ESA)
  • Income-based Jobseeker’s Allowance (JSA)
  • Working Tax Credit

If you are currently receiving any of those benefits, you cannot claim Universal Credit. Universal Credit is still being introduced across the UK, you will be informed when your benefits are being changed to Universal Credit.

Am I entitled to Universal Credit?

You may be entitled to Universal Credit if you:

  • are out of work or are on a low income
  • are 18+ (if you are 16 or 17 you may still be eligible)
  • and your partner together have £16,000 or less in savings
  • or your partner are under State Pension age
  • live in the UK

How to Apply for Universal Credit

You need to apply for Universal Credit online. If you and your partner live together, you should apply as a couple. To apply you will need, your bank account details, email address, and more information. Click here to see what else you need to apply.

Are You Eligible For a Universal Credit Advance Payment?

Unlike getting a small loan in the UK, Universal Credit advance loan payments are interest-free. They are available to anyone who can show they’re in ‘financial need’. This compares favourably with previous benefits when claimants had to prove to the DWP that they were in financial distress, This caused ‘serious risk to their health and safety’.

For Universal Applicant this ‘financial need’ could be because they’ve transferred from a weekly/fortnightly benefit. They have had to wait so long for their first Universal Credit payment because of the chronic delays. Alternatively, they could be struggling because they left their previous job with only a week’s wages and not a month’s. The amount that they’re eligible to receive is 40% or 50% of their monthly standard allowance depending on their circumstances. They estimate this according to how much they could comfortably afford to repay.

According to DWP figures, half of those affected have applied for an advance. However, there are worries that people in need still have to wait for their advance.

Addressing this concern at the Tory Party Conference, David Gauke said,

“Claimants… will receive this advance within 5 working days. And if someone is in immediate need, then we fast-track the payment, meaning they will receive it on the same day.”

For most people in need having to wait 5 days for their advance payment seems a long time compared to how lenders can pay out short term loans online so much faster – in hours rather than days.

What Do Debt Advisory Charities Say?

Debt advisory charities, food banks and other consumer organisations welcomed the announcement. It would be easier for Universal Credit recipients to receive advance payments. However, they all expressed their general dissatisfaction with all aspects of this new benefit and that its roll-out should not happen until the Chancellor address these problems. Also, they said that the 7-day waiting period before claims start should not continue. Claims should be speeded up, and there should be more flexible repayment terms.

Debbie Abrahams, the Labour Shadow Secretary for Work & Pensions said in response to this measure,

“It is an insult to those pushed into debt and rent arrears by this Government’s punitive 6-week waiting policy. That the Work & Pensions Secretary is suggesting they get another loan to make ends meet.”

Undermining the government’s plans even further is the fact that 12 of their backbencher MPs, led by Heidi Allen, have added their voices to the calls for the implementation of Universal Credit to be put on pause. Despite this opposition from its own party, David Gauke made it clear that the roll-out would continue as planned.


The comments made by Philip Hammond show you what can happen when ministers make off-the-cuff remarks about matters that don’t come under their jurisdiction. To regain control of the interview all he could do was repeat the government’s party line. That Universal Credit would give people an incentive to work and smooth the transition from benefits to work without them receiving penalties. Although this is undoubtedly true, this doesn’t address the key reasons why people are dissatisfied with Universal Credit. Glibly recommending that recipients get a loan shows a lack of understanding about what the people he’s supposed to be representing are going through.

Bryson Oakes
Bryson is the leading engine of the Quick Loans Express blog. He has worked in the financial industry for 15 years and is the go to man for all money-related tricks and tips. When he is not spreading the latest financial news, Bryson can be found playing cricket with his mates or running in the park with his dog.

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* Warning: Late repayments can cause you serious money problems. For help, go to moneyhelper.org.uk.