Benefits & Debt

Overview

Debt can have serious implications for anyone, no matter how much money they make. When you’re on low income, however, every penny counts. That’s why it’s so important you consider whether you qualify for benefits and other financial support.

In this guide we’ll examine debt and benefits, including whether benefits can help you deal with your debt, what benefits you might be entitled to, and what to do if you’re already on benefits and still struggling financially.

Can I claim universal credit if I’m in debt?

Yes, but it’s possible for the Government to take money directly from your universal credit payment if you’re in debt and refuse to pay.

Can benefits help me deal with my debt?

Benefits are government payments that are aimed at supporting people who are on low income and have difficulty earning more money, whether that’s because they’re long-term unemployed, they have children on dependents, or they’re ill or disabled.

If you’re struggling financially and owe money to creditors, claiming benefits may be able to alleviate some of your financial problems. That’s why it’s crucial you make sure you’re claiming all of the benefits you’re legally entitled to.

What benefits might I be entitled to?

Although most UK citizens are aware of the existence of benefits, hundreds of thousands of people don’t know they’re entitled to some form of financial support.

Whether you’re entitled to benefits, and how much money you qualify for, depends both on your financial situation and your personal circumstances. You may qualify for benefits if you:

  • Are ill or disabled
  • Are long-term unemployed
  • Are unemployed and actively seeking a job
  • Have children under a certain age

To check if you’re entitled to certain benefits, visit the UK Government website and use their debt calculator. Click here to find out.

Are there benefits for people on low income?

If you’re having money issues, there are several benefit payments available in the UK to offer you a level of financial support.

Universal credit

Universal credit is an overarching benefit in the UK – it combines several benefits that were previously available into a single monthly payment, and it’s the standard benefit for most local councils.

If your local council hasn’t yet adopted universal credit as their standard benefit, you might be able to apply for the benefits listed below.

Jobseeker’s allowance

Jobseeker’s allowance (JSA) is a benefit for people who are out of work and actively seeking a new job. It offers you financial support during the job hunt. You might be able to qualify for JSA if you’re out of work entirely, or working less than 16 hours per week.

Income support

Income support is a benefit for people who are either on low income, or earning no money at all. Income support is one of the benefits that has now been superseded by universal credit, so in most council areas you won’t be able to make a new application for income support.

Working tax credits

Working tax credit is a benefit aimed at supporting people who are in work but still qualify as low-income. It has been replaced by universal credit in most cases, but if you currently receive child tax credit, you can still qualify for working tax credit.

Housing benefit

Housing benefit is aimed at helping low-income people with household spending. You may qualify for housing benefit if you are on a low income and need support to help pay your rent. In certain council areas, you might need to apply for universal credit instead.

How we helped Paige

It was literally the best decision of my life, and it has actually changed my life, cheesy as that sounds, it has changed my life.

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Are there benefits specifically aimed at families?

Yes. In the UK there are several benefits that offer financial support to families in particular. Two of the most common are child tax credits and the child benefit.

Child tax credits

As mentioned previously, child tax credits and working tax credits are offered in tandem. If you qualify for one, you should qualify for the other.

Child benefit

If you qualify for child benefit, you will get a certain amount of money assigned to you for every child you have, so the total amount you get depends on the number of children you have.

Child benefit is tax-free for anybody who earns under £50,000 per year and is usually paid every four weeks, although you can arrange to have it paid weekly.

hundreds of thousands of people don’t know they’re entitled to some form of financial support.

What if I'm already on benefits and still struggling financially?

For many people who claim benefits, the money they receive isn’t enough for them to avoid financial difficulty, especially if they’re struggling with debt.

If you’re already claiming benefits and still find yourself struggling to make ends meet, there are some steps you can take that might improve your situation.

Make sure you’re getting every benefit you’re entitled to

If money is tight and you’re already on benefits, you may not think that more benefits is the answer to your problems, but you’d be surprised how many people don’t claim certain benefits because they don’t realise they’re entitled to them.

There are tools online that allow you to input a few details and check which benefits you’re entitled to, like the UK Government benefits calculator. You can find it here.

Talk to your creditors

One of the most common mistakes people with debt make is not communicating with their creditors. You may be tempted to ignore calls or emails from creditors, but that tends to make things worse.

If you have debts you can’t afford to repay, or you can’t keep up with very high interest rates, reach out to your creditors. They might be happy to discuss a gradual payment plan with you, but you’ll never know unless you ask the question.

Get free debt advice

If you’re debts are reaching unmanageable levels and creditors are starting to put pressure on you, it’s time to seek debt advice from a professional.

There are many charities and debt management companies who offer free advice to people in your situation, and can even point you in the direction of Government debt relief schemes like breathing space.

Consider a debt solution like an IVA

Formal debt solutions have helped hundreds of thousands of people to manage their finances and deal with debt in a way they can afford.

Solutions like IVAs and Trust Deeds take all your unsecured debts – credit card debts, utility bills, fuel arrears – and transform them into affordable monthly payments. When your repayment term is over, your remaining debt will be written off.

Where can I get money advice to help with my debt problems?

If you’re having money troubles and aren’t sure where to turn, expert advice can make a big difference. That’s where we can support you.

At Your Debt Expert, we’re a UK debt management company that specialises in helping people repay or write off problem debts. Our services range from free debt advice, to further help like formal debt solutions.

If you’re struggling with debts you can’t afford and need guidance on what to do next, contact us today – our phone number is 0800 082 8086.

Where can I get more advice on Benefits & Debt and other debt solutions?

To discuss your options and get the support you need to deal with your debt today, contact us now on 0800 082 8086 or click the button below to get started