In 2025, the Department for Work and Pensions (DWP) confirmed that eligible benefit claimants can apply for a Budgeting Loan of up to £812 to cover essential one-off costs.
This interest-free loan is part of the government’s long-standing Social Fund, helping low-income households manage critical expenses such as furniture, clothing, housing costs, or moving expenses—without resorting to high-interest credit.
Unlike grants, this support must be repaid, but repayments are deducted automatically from benefit payments, making the process simple and manageable.
DWP spokesperson: “The Budgeting Loan ensures people on low incomes can cover vital expenses in a fair and affordable way—without adding to financial stress.”
Table of Contents
Overview – DWP Budgeting Loan 2025
| Category | Details |
|---|---|
| Administered By | Department for Work and Pensions (DWP) |
| Type of Support | Interest-free loan (repayable) |
| Maximum Loan Amount | £812 |
| Minimum Loan Amount | £100 |
| Eligible Benefits | Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA), Pension Credit |
| Exclusions | Universal Credit claimants (apply for Budgeting Advance instead), New Style JSA/ESA claimants, and those in industrial action |
| Eligibility Duration | Must have received a qualifying benefit for at least 6 months |
| Savings Limit | £1,000 (£2,000 if aged 63 or over) |
| Outstanding Loan Limit | Not eligible if already owe over £1,500 in Budgeting/Crisis Loans |
| Repayment Period | Up to 104 weeks (2 years) |
| Interest Rate | 0% (interest-free) |
| Payment Method | Paid directly into the benefit account |
| Application Method | Online or via the SF500 form by post |
| Decision Time | 7 days (online) / up to 21 days (postal) |
| Expected Start | Ongoing through 2025 |
What the Loan Can Be Used For?
The Budgeting Loan helps people cover essential or unexpected costs that can’t be managed within regular benefit payments.
Common approved uses include:
- Furniture and household appliances (beds, fridges, washing machines)
- Clothing and footwear for adults or children
- Rent in advance or moving costs for a new home
- Maternity or funeral expenses
- Costs for starting or returning to work, such as uniforms or equipment
- Travel within the UK for important family or personal reasons
- Repaying existing debts taken out for similar essential needs
Tip: Budgeting Loans are not for ongoing expenses like rent, bills, or council tax. They’re meant for one-time or irregular costs that would otherwise cause financial strain.
Eligibility Rules
To qualify, applicants must meet all of the following conditions:
- Have been receiving one or more qualifying benefits for at least 26 weeks:
- Income Support (IS)
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Pension Credit (PC)
- Not receive Universal Credit (you would apply for a Budgeting Advance instead).
- Not be on New Style JSA or ESA.
- Not currently participating in industrial action (e.g., strikes).
- Not owe more than £1,500 in other Social Fund loans.
- Have savings below £1,000, or £2,000 if over 63.
Note: If you recently moved from Universal Credit to Pension Credit, your time on Universal Credit still counts toward the 6-month qualification period.
How Much You Can Borrow?
The amount offered depends on your household type, current debts, and repayment ability.
| Household Type | Maximum Loan Amount |
|---|---|
| Single person | £348 |
| Couple (no children) | £464 |
| Claimant or couple with children (receiving Child Benefit) | £812 |
The minimum loan is £100, and the DWP may offer a lower amount based on affordability and savings.
Example: A single claimant with no dependants and £500 in savings may be offered £250, depending on existing repayments and income level.
Repayment Process
One of the key advantages of this scheme is that it is interest-free — you only repay the exact amount borrowed.
- Repayments are automatically deducted from your benefit payments.
- The standard repayment term is up to 104 weeks (2 years).
- The DWP determines the weekly deduction amount based on your financial situation.
If you stop receiving benefits before repayment is complete, DWP’s Debt Management team will contact you to arrange affordable instalments.
Example Repayment
| Loan Amount | Repayment Period | Approx. Weekly Deduction |
|---|---|---|
| £812 | 104 weeks | £7.80 per week |
| £464 | 104 weeks | £4.45 per week |
| £348 | 104 weeks | £3.35 per week |
This system ensures repayments remain manageable and proportionate to income.
Application Process
1. Online Application
The quickest way to apply is via the DWP’s online portal.
- Choose how to receive updates: email, text, or letter.
- Most online applicants receive a decision within 7 days.
2. Paper Application (Form SF500)
If you cannot apply online, use the SF500 form (available online or by post).
- Fill in all sections, especially your reason for applying, benefit details, and savings information.
- Post it to the address provided on the form (not to your local Jobcentre unless specified).
- Postal applications may take up to 21 days for a decision.
Payment
- Once approved, the DWP will deposit the loan into your usual benefit account.
- Online applicants are typically paid within 7 days of acceptance.
- You’ll receive confirmation by text or email once the payment is made.
What to Do if You Disagree with a Decision?
If your application is refused or you’re offered less than expected:
- Request a review within 28 days of receiving the decision letter.
- Include your name, National Insurance number, and a clear explanation of why you disagree.
- The DWP will re-examine your case and send a new decision notice.
- If you still disagree, you can escalate it to the Independent Case Examiner (ICE) for further review.
Other Financial Support Options
If you do not qualify for a Budgeting Loan or need additional help:
| Region / Group | Alternative Scheme |
|---|---|
| Universal Credit claimants | Budgeting Advance (works similarly to Budgeting Loan) |
| Wales | Discretionary Assistance Fund |
| Scotland | Scottish Welfare Fund – Crisis Grants and Community Care Grants |
| Northern Ireland | Discretionary Support Payments and Short-term Benefit Advances |
| England (Local) | Local Welfare Assistance schemes or Council emergency grants |
These alternatives ensure that no household is left without support in times of financial hardship.
Key Takeaways
| Key Point | Summary |
|---|---|
| Maximum Loan | £812 (for households with children) |
| Interest Rate | 0% – repay only what you borrow |
| Eligibility | On qualifying income-related benefits for at least 6 months |
| Repayment Term | Up to 2 years (deducted from benefits) |
| Application Options | Online or postal (SF500 form) |
| Decision Time | 7–21 days, depending on the method |
| Payment Use | Essential one-off costs like furniture, rent advance, or travel |
| Alternative Support | Budgeting Advance (UC), regional welfare funds, council aid |
FAQs
Q1. How much can I borrow from the DWP in 2025?
Ans. Up to £812 depending on your household size and benefits.
Q2. Is the Budgeting Loan free money?
Ans. No. It’s a repayable loan, but interest-free, meaning you only repay the amount you borrow.
Q3. How do I apply?
Ans. Apply online through the DWP portal or submit a paper SF500 form by post.
Q4. Can Universal Credit claimants apply?
Ans. No. They should apply for a Budgeting Advance instead.
Q5. What happens if I stop getting benefits?
Ans. You’ll need to arrange repayments directly with the DWP’s Debt Management team.