The Universal Credit crisis continues to impact millions across the UK in 2025, with the number of Universal Credit claimants reaching record highs. About 7.9 million people were receiving Universal Credit as of June 2025, reflecting ongoing economic challenges including inflation, rising costs, and employment shifts. For many, the wait for their first payment or meeting unexpected expenses can cause immediate financial hardship.
Fortunately, the Department for Work and Pensions (DWP) offers four key types of advance payments designed to support claimants in crisis. This article unpacks these options clearly and comprehensively, so both individuals and professionals working in welfare, financial advice, or social care can understand how to access and benefit from these advances.
Universal Credit Crisis
| Key Point | Details |
|---|---|
| Universal Credit Claimants (June 2025) | 7.9 million people on Universal Credit, the highest level since its introduction in 2013. |
| Main Types of DWP Advance Payments | New Claim Advance, Change of Circumstances Advance, Budgeting Advance, Hardship Payment |
| Typical Payment Delay | First payment usually arrives about 5 weeks after claim; advances help bridge this gap. |
| Repayment Period | Interest-free advances repayable over 6 to 24 months through future Universal Credit payments. |
| How to Apply | Online via Universal Credit account, Jobcentre Plus work coach, or Universal Credit helpline. |
| Official Source for More Info | Universal Credit – GOV.UK |
The Universal Credit crisis in 2025 shows no sign of easing amid economic uncertainty and increasing living costs across the UK. Understanding the four key DWP advance payments—New Claim Advance, Change of Circumstances Advance, Budgeting Advance, and Hardship Payment—can make a real difference for claimants facing immediate financial difficulty. These interest-free advances are a vital tool to bridge income gaps and manage crises but always remember to plan repayment carefully.
Understanding the Universal Credit Crisis in 2025
Universal Credit was introduced to simplify and consolidate several welfare benefits into one monthly payment designed to support working-age individuals and families on low incomes or out of work. However, economic pressures—including inflation, increased living costs, and persistent financial uncertainty—have led to unprecedented demand. Since early 2022, the caseload grew sharply from 5.5 million to nearly 8 million claimants by mid-2025.
Many of these claimants are families with children, representing about 50% of households receiving Universal Credit payments. The time it takes to receive the initial payment—usually a five-week wait after applying—creates a major financial gap that can lead to hardship. This is where the DWP’s advance payments come in, providing interest-free loans to help cover essential costs while waiting.
What Are DWP Advance Payments?
Advance payments from the DWP are interest-free loans designed to ease the transition for Universal Credit claimants who need immediate financial help. These payments temporarily increase your income but are deducted from future Universal Credit payments via gradual repayment. Let’s explore each type in detail.
1. New Claim Advance
- Who it’s for: People applying for Universal Credit for the first time who face hardship waiting for their initial payment.
- How much you can get: Up to 100% of your expected first payment.
- How to apply: Online through your Universal Credit account, via your Jobcentre Plus work coach, or by phone.
- Repayment: Over up to 24 months, starting with your second Universal Credit payment.
Example: If you apply for Universal Credit and your first monthly payment is expected to be £800, you can apply for a New Claim Advance of up to that amount to cover rent, food, or utilities during the waiting period.
2. Change of Circumstances Advance
- Who it’s for: Existing claimants who have reported a change such as increased rent, new childcare costs, or income loss but have not yet received the updated payment.
- How much you can get: Up to the amount of the expected additional payment.
- How to apply: Contact your work coach or call the Universal Credit helpline.
- Repayment: Usually repaid within 6 months, extendable to 24 months for larger sums.
Example: If your rent increases by £150 a month and your Universal Credit payment hasn’t accounted for it yet, you can request this advance to cover the gap.
3. Budgeting Advance
- Who it’s for: Claimants facing unexpected costs such as needing a new washing machine, essential repairs, work-related expenses like clothes or travel, or other emergencies.
- How much you can get: Amount depends on your circumstances; maximum usually between £100 and £812.
- How to apply: Apply through your work coach or helpline.
- Repayment: Over 12 to 24 months from your Universal Credit payments.
Example: If your fridge breaks down unexpectedly and you have no funds to replace it, a Budgeting Advance can provide necessary funds to keep your household running.
4. Hardship Payment
- Who it’s for: Claimants whose Universal Credit has been reduced due to a sanction (for example, for not meeting claimant commitments), but who cannot meet fundamental needs like food or heating.
- How to apply: Online via your Universal Credit account, through your work coach, or by phone.
- Repayment: These are recoverable but repayments can be paused if repaying would cause severe hardship.
Example: If your Universal Credit payment was stopped due to a sanction but you cannot afford basic necessities, you can apply for a Hardship Payment to temporarily ease the burden.
How to Apply for DWP Advance Payments
Applying for any of these advance payments is straightforward:
- Online: Log into your Universal Credit online account and select the ‘apply for an advance’ option.
- Work Coach: Speak directly with your Jobcentre Plus work coach who can help with the application.
- Helpline: Call the Universal Credit helpline if you need advice or don’t have online access.
Before applying, gather documents that support your need, such as rent agreements, utility bills, receipts for emergency expenses, or notices of changed circumstances. These may help speed up the process.
Important Practical Advice
- Advances are interest-free loans but must be repaid. Your future Universal Credit payments will be reduced to recover the advance.
- Plan your budget accordingly: Repayment begins with your next payment, so ensure you can manage reduced payments.
- If you stop claiming Universal Credit before the advance is fully repaid, DWP will recover the money through other benefit payments or legal measures.
- Honesty matters: The DWP may ask about your financial situation and what steps you’ve taken before applying.
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FAQs About Universal Credit Crisis
Q1: Can I get an advance before I start receiving Universal Credit?
You can apply for a New Claim Advance if you’ve applied for Universal Credit and are waiting for your first payment.
Q2: How soon will I receive an advance payment once approved?
Advance payments usually arrive within 7 working days, but processing times may vary.
Q3: What if I am struggling to repay the advance?
Contact the DWP as early as possible to discuss changing your repayment schedule or extending it.
Q4: Are advances considered taxable income?
No, these advances are loans and not taxable income.
Q5: Can I have multiple advance payments at the same time?
Typically, only one advance payment can be outstanding, but exceptions may apply, especially for budgeting advances in emergencies.
The Bigger Picture: Why This Matters in 2025
The rising number of claimants illustrates systemic financial pressures facing British households. With nearly 8 million people relying on Universal Credit, many face difficult decisions about paying rent, heating their homes, or feeding their families. Crisis interventions like DWP advance payments provide essential short-term support, enabling claimants to stabilize their finances while waiting for benefit payments.
Professionals working with vulnerable populations can use this knowledge to guide clients effectively, helping them access these advances when needed. Claimants themselves benefit from understanding their rights, options, and responsibilities related to these payments.
