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How to budget your money on Universal Credit?

Unlike legacy benefits, Universal Credit is paid in a single monthly payment, meaning managing your money is essential to make sure it lasts the month. Find out how to budget on Universal Credit.

Why you should budget on Universal Credit

Making a budget when claiming Universal Credit is vital in ensuring you have enough money to live on and pay the bills.

The move from legacy benefits to Universal Credit can be daunting, especially if you have moved from weekly or fortnightly payments. Also, you may now have to pay rent to your landlord instead of your housing benefit being paid to your landlord.

The following process will allow you to budget on Universal Credit to help you manage your finances.

How to start a budget for Universal Credit

A budget is relatively simple to calculate. Firstly you need to make two lists:

  1. The money you receive - your salary if you are working, your Universal Credit payment and any other benefits or income you receive.
  2. Money that you spend - this can include rent, electricity bills, insurance as well as living costs, and any other spending.

Calculating your income

Now you should calculate how much money you get from the following categories:

Benefit payments

You may receive other benefits in addition to Universal Credit. Find out the exact amount you are receiving and make a note of when these payments are made to you (weekly, monthly).


If you are claiming Universal Credit and required to work, you should look at your payslip and make a note of how much you’re paid after tax and any other deductions.

Other income

It would be best if you made a note of any other income you receive, such as a pension or child maintenance.

Calculating your outgoings

Now you should calculate how much money you spend from the following categories:

House bills

Make a list of all household bills you pay and record how much you pay and how often. This can include but not limited too:

  • Rent or mortgage payments.
  • Ground rent or service charges.
  • Utility bills such as gas, electricity, council tax and water.
  • Mobile phone.
  • TV licence.
  • Digital TV subscription.
  • Internet.

Living costs

Estimate your living costs as these are likely to fluctuate week to week. For instance, look at your previous few months of food costs and work out a weekly budget. The same can be done for shopping, dentist appointments, hairdressers etc. but you can average these out over the year.

Insurance, loan and credit cards

Make a list of any insurance, loan or credit card repayments you make.

Children, relatives and pets

Note down any payments you make for any of the following:

  • Childcare.
  • School trips.
  • Lunch money.
  • The money you pay back to relatives or friends.
  • Any costs you have for a pet such as insurance, food, vets bills.

Like other categories, these costs may be both regular or irregular, so it’s best to work out a monthly average by adding how much you spend a year and dividing by 12.


It would help if you calculated how much you spend on travel. This can include any payments made for a car, public transport or taxis.


Here you should include one-off events such as Christmas and birthdays, so they have been covered in your budget.

Use a budget calculator

Once you have collected information for all of your incoming and outgoings, you should use the free online budget planner.

This budget planner allows you to input all of your costs for weekly or annual payments and will automatically calculate your monthly budget.

You can also save your budget so if your bills increase, or you receive less paid work one month you can make changes quickly.

Tips to make your budget last on Universal Credit

Here are several tips to make your budget last longer on Universal Credit:

  • Look for cheaper mobile phone deals, and ask yourself if you need a new phone when your contract ends? Instead of upgrading, you can keep the old phone and have a sim only contract which can reduce your monthly bills.
  • Compare the market for the best broadband or TV package.
  • Don’t just stay with the same gas and electric supplier. Look at what the best deal is for you and change if it’s cheaper.
  • See if your bank can set up a Jam Jar account - designed to help you separate your money into different types of spending. Your payment will be paid into one account that is set up to cover your essential household bills. The money left over is placed into another account for your other spending. This means you won’t spend the money meant for your rent or other household bills.
  • If you have debts, you might need to look at managing your debts.

If you have budgeted for Universal Credit and are struggling to meet your basic needs, you should speak to a local welfare benefits officer who will be able to discuss further options including personal budgeting support for Universal Credit.

Household Support Fund to help through Winter 2021-22

If you are worried about money and currently claim benefits, you may be eligible for the new Household Support Fund (HSF), which runs between October 2021 to 31st March 2022.

Find out more about Household Support Fund and how to apply here.

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