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Money for Life work in partnership with the Money Advice Service, an independent organisation set up by government. Money AdviceService provides free, unbiased money guidance across the UK to help people make the most of their money.  If you have a question or need help, you can chat to them here.

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Universal Credit – what to do when the money runs out?

So, you’re out of work and down to your last few ££s; it can be a depressing situation but one most of us have found ourselves in at one time or another. What to do when you can’t afford a bag of crisps or a bus ticket, let-alone your next phone bill… Sell a kidney? Sign up for a medical trial? Crawl under your duvet and cry?

Sam Robinson, Advice Worker, talks you through making a Universal Credit claim and the practical steps you can take for surviving the long wait for the money to hit your bank account.

If you’re likely to be out of work for more than a week or two and (like most of us) you don’t have a pile of cash under the mattress, claiming the correct benefits is essential.

Lots of work has gone into simplifying the benefit system but in some ways it seems more complicated than ever. Before you can make a claim, the first step is to work out whether you come under the new system, called Universal Credit, or the old system of “legacy benefits”. Which of the two systems you come under depends on your postcode – you can use a postcode checker to find out if Universal Credit has arrived in your area.

Making a Claim

By January 2019, everywhere will have moved across to Universal Credit so, other than a few exceptions, all working age adults will come under the new system. How do you actually go about making a claim? Well, the good news – it’s all done online. The bad news? There’s more to it than just filling out the form. You’ll probably have to provide some documentation, especially if you need help with your rent as well as living costs. You’ll also have to attend an appointment at your local Jobcentre to meet your Work Coach and sign your ‘claimant commitment’.

It’s at this point that many people simply give up. My advice? Stick with it if you can, and if you can’t, get some help from your local Citizens Advice Bureau or independent advice service.

What next?

You’ve made a successful claim – well done, you’re almost there. Just the small matter of a five week wait (yes I’m afraid so) for your first payment. So how do you survive the ‘benefits black hole’? Here are my three top tips:

1 – Apply for an advance payment. You can borrow your first monthly Universal Credit payment, paid into your account within three working days. For a single person (without housing costs) aged under 25 this means you can get an advance of around £250, which you then pay back via a deduction from your first 12 monthly benefit payments. Ok, we’re not talking megabucks, but it can make all the difference until the regular payments start.

2 – Find out about local welfare. Your local Council probably has a scheme where they can provide emergency payments to people in financial need. These payments often come as supermarket vouchers or money on a pre-paid card, and most importantly they’re not loans so you don’t have to pay the money back. If you’re not sure who your local Council is there’ a postcode checker for that as well so don’t worry. Give them a ring or search for information about local welfare on their website. This type of help is a bit of a lottery, some areas will have more generous schemes than others but almost all have something, so it’s definitely worth finding out more.

3 – Ask about foodbanks. The fact is five weeks is a really long time to go without money, so it’s perfectly fine to seek some help with the food costs. Your local foodbank will be able to provide short-term help with essential groceries which can help your money stretch that little bit further. Find your nearest foodbank online with an internet search and look for details of how you can get referred.

And finally

Resist the temptation to look for a quick fix (payday loans, doorstop lenders, loan sharks). No situation is made better by taking out short-term, high interest finance; it’s never a good idea. Going broke isn’t a problem you can fix overnight but looking for help in the right places will make sure the bad times don’t last forever.

Instead, make sure you access the benefits and grants you’re entitled to. To find out what these are, use the Turn2Us benefits and grants calculator – you make be entitled to more than you think!

Chat

Money for Life work in partnership with the Money Advice Service, an independent organisation set up by government. Money AdviceService provides free, unbiased money guidance across the UK to help people make the most of their money.  If you have a question or need help, you can chat to them here.

Launch Chat

Chat to the Money Advice Service
Monday to Friday, 8am to 6pm
Saturday, 9am to 1pm.