Monthly benefits and universal credit

Some eight million people are set to receive Government benefits in a completely new way. Universal Credit is gradually replacing the existing system of support for people on a low income, by combining various benefit payments into one monthly sum. You can find comprehensive guides to the Universal Credit system at www.moneyadviceservice.org.uk by clicking here.

If you have recently become eligible for Government benefits or will be receiving the Universal Credit monthly payment, it’s time to start handling your funds differently. The benefits landscape was changed to be “quicker, more accurate and easier to understand”, according to the Work and Pensions Secretary, Iain Duncan Smith. Here’s an idea of what that could mean for you and your family:

In or out of work

Universal Credit is expected to replace the existing benefits system for all by 2017. It offers support to people of working age or above, who are looking for work or are on a low income. You make your claim for Universal Credit online. Then, if you find work or your working hours increase after you have moved on to the system, Universal Credits will be reduced. Use the Government’s Benefits Calculator to see how this works in practice.

Budget from scratch

Take a fresh look at how you manage your household spending. Universal Credit is different and is paid out as a monthly sum, replacing the following four benefits which were paid out more frequently:

  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Child Tax Credit

This in itself is a big change for many people. It means planning further ahead and drawing up a budget to cover all of your spending for a full four or five weeks. Draw up a budget of all your household income and outgoings per month and factor in a percentage to help you deal with any emergency costs that could spring up.


Be prepared and you could make a seamless change. If you don’t already have a bank or building society account that can receive the payment for you, put this at the top of your to-do list. Universal Credit payments can be paid monthly into a single personal account or into a joint account if you are a couple and you find it better to manage your money together.

Making the change

Households across the nation have been gradually adapting to the new Universal Credit system since it was first launched in October 2013. The change means millions of people overhauling how they make ends meet and there have been many concerns that people will struggle to adapt. Figures reported by The Guardian, when the changes were announced, suggested that 90 per cent of Citizens’ Advice clients would need extra advice to deal with the benefits changes. If your benefits payments are changing, online tools exist to make the transition easier to understand in practical terms – such as this calculator on the Policy in Practice website or the benefit calculator on the Gov.uk website, which will estimate all your entitlements including Universal Credit.

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One Response to Monthly benefits and universal credit

  1. It sounds to me like you folks across the pond are really taking care of the less fortunate in your society. I give you guys a big round of applause for that. It isn’t always the same here in the USA.
    Brad @ How To Save Money recently posted..Stop Drinking Alcohol to Save MoneyMy Profile

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