Universal credit

Managing your money

Universal Credit is generally paid monthly and any housing costs (formerly housing benefit) will be paid to you.

It is now possible for UC applicants in Scotland to have their payments paid twice a month and for their housing costs paid direct to their Landlord. These are referred to as ‘Scottish choices’. More information can be found on the Scottish Government website.

You will also be offered Personal Budgeting Support from your work coach. This budgeting support is carried out by a local advice agency.

In limited circumstances it is possible for payments to be split between partners. You should speak to your work coach about this. These requests are considered under an Alternative Payment Arrangement (APA).

Remember that Council Tax Reduction (CTR) is not part of Universal Credit, so if you are liable for council tax then remember to claim CTR.

If you are affected by the ‘bedroom tax’, you will also have to apply for a Discretionary Housing Payment to cover the reduction in your housing cost award as a result of being under occupied.

The Money Advice Service's Online Money Manager can help you make the most of your money while you are on Universal Credit. It offers help and advice on topics such as opening a bank account, keeping on top of bills and dealing with debt. Or speak to your work coach, who can refer you to a local advice agency for budgeting support.

Many of the major banks now offer free basic bank accounts and Capital Credit Union have a range of saving and borrowing options.

If you have debts there are help agencies who can offer free confidential advice and support.

This video gives an overview of how you can deal with managing a monthly Universal Credit payment.

Voiceover: Benefits are changing. The new benefit, called universal credit, will mean that instead of getting money every week or every fortnight, you will get one monthly payment.

If you receive help towards your rent, this will be included in the monthly payment and not paid directly to the landlord as it is at the moment.

All this means that you will have to be extra careful about how you spend your money.

Young claimant: In bus stop. Talking on mobile: “Hi, How are you? (listens) I’m great. I have just got my Universal Credit .It’s really cool. I’ve got loads of money. Hundreds of pounds. I’ve never had so much at one time. (listens) A holiday would be great. But I think maybe I am going to have to speak to somebody about what to do. It’s a bit scary. It’s got to last a month and there’s bills to pay – including my rent.

Voiceover: The monthly payments will go into a bank account or other types of accounts, such as a Post Office account.

Some accounts allow you to set up automatic payments for things like gas and electricity and rent. These are called direct debits and standing orders and they make sure really important bills are paid on time.

 Not all accounts let you set up a standing order and direct debit. So it’s important to check that the account you have or the one you choose is suitable for your needs.

Bank manager in office across desk from claimant. “How can the bank help you today?”

Claimant: “I am getting most of my benefits, including the money I get to help with my rent, paid in one lump. It’s a new benefit called Universal Credit. I need to make sure the money lasts and that my bills are paid – but I don’t know how to do that.”

Bank manager: We need to know what bills you have and then we can help you set up a way to pay – this could be using something called a direct debit or a standing order – this means that the money goes directly from your account to the person you need to pay and it does that on the same day every month.

Claimant: How much will it cost to do that?

Bank manager: “Nothing. Basic bank accounts don’t charge for this. We’ll pick a date for the payments just after you get your Universal Credit. That way there will be enough money in the account each month. Once these big important bills are paid you will know how much you have to spend on other things for the rest of the month.”

Voiceover: Some people may find this confusing or frightening. But help with opening a bank account and planning a budget is available.

If you use a computer, then the websites of The Money Advice Service and Scotland’s Financial Health Service are very useful.

If you find reading and counting difficult you could get help from adult learning staff and there are many organisations who have advisers who can help. A full list is shown at the end of this video.

Bank and building society staff have plenty of useful information.

Bank Manager: Coming to see us was exactly the right thing to do. If we get everything set up properly at the beginning you will find it much easier to manage your money from month to month.

Claimant: I am frightened of banks. I don’t want to have to pay huge amounts if there isn’t enough money in the account.

Bank manager: We will help you. And we are in touch with other organisations who are very good at this sort of thing. As I said – you did exactly the right thing coming in to see us.

Voiceover: Looking after your money month to month can be a challenge. But don’t panic. You are not alone and help is available.

Further information on managing your money is available on our budgeting advice page and GOV.UK.