Universal Credit budgeting advice

From April, some people making new claims for unemployment benefits will start receiving Universal Credit instead of Jobseekers Allowance.

Universal Credit will replace six major benefits and tax credits, and is designed to get people closer to the world of work - it will be paid monthly, because most people in work are paid this way, and it will be accessed online, the same way people manage their online bank accounts.

This is designed to give people more accountability and more control over their finances. Monthly payment will ease the transition into work and will make it easier for households to take advantage of cheaper tariffs for essential costs such as utility bills.

Ahead of these changes, the DWP is working with a range of partners to make financial services more accessible for low income households. The Money Advice Service will be providing dedicated and impartial help and support for claimants.

Karen Broughton, Director of Service Delivery at the Money Advice Service, suggests four easy steps to help claimants ready.

• Make sure you have a bank account (or similar). Universal Credit will be paid straight into your account, so in order to receive the new benefit payments you will need a bank or building society account, or a different banking service like a prepaid card or a credit union account. 
• Decide whether you need a joint account. If you live with your partner, and you’re both eligible for Universal Credit, you’ll get a single monthly payment which can be paid into either a joint or an individual account. 
• Check whether you can set up automated bill payments. Setting up direct debits or standing orders to pay your rent and energy is an efficient way to deal with those bills straight away. If you can't, you should open a basic bank account, or find a different provider. 
• Draw up a monthly budget. Universal Credit is paid monthly, so you will need to budget when you move to the new system. Try keeping a spending diary for a few weeks, recording money coming in (like salary or wages, pensions or entitlements) and payments going out (such as your rent or mortgage, and living expenses and other spending). This way you’ll be able to keep track of your money and figure out the best ways to cover your essential expenses.