Universal Credit in the UK
Five years ago, the goverment issued some changes in the social aid system, and many credits such as the Jobseeker’s Allowance have been replaced by this universal tax credit. It is meant to make the bureaucracy and administrative costs of several allowances and social credits easier for the system and the citizens. People who are employed on low income, or are unemployed but looking for a job, can claim for an Universal Credit in the UK. Since this is a tax credit, it will be repayed with taxes in the following months. The Universal Credit is a monthly payment that is deposited in a selected account for as long as the person remains unemployed or on low income. When income increases, the tax credit decreases as much as possible without leaving the citizen below minimum wage.
If you want to apply for Universal Credit, first you have to find out whether or not you are eligible. There are some prerequisites that you have to meet, in example a certain age range or a maximum amout of savings on your name. This information is often disclosed at many official websites, including the HMRC website. However, it is always useful to ask for an appointment and get your case reviewed by a member of the office’s staff, just to make sure that no exceptions apply in your case.
You can also go to Govbenefits expert help, which is an online portal where plenty of useful information on Universal Credit and other allowances is disclosed. If you get informed before you talk to a representative, the process might be faster and you might have at hand all you need to push it forwards. At Govbenefits you will also find contacts you can use for making claims, asking questions or requesting for a change in your submission. Knowsley Government advice line is another good contact for you to make enquiries about Universal Credit and how to apply.
Getting out of debt
If you find yourself owing more money than you can afford to pay, borrowing more money doesn’t seem to be a solution. On one hand, you do pay your debts, but on the other hand, now you have new debts. However, this option isn’t as meaningless as it may seem. Even if you still owe the same amount, this strategy, which is called refinancing, allows you to keep your debts fresh. The more time you owe money, the worst it affects your credit scrore, which will later prevent you from getting other financial benefits like more loans or even credit cards. Plus, your lender might get entitled to take punitive actions on you, like repossessing. If you refinance your debt, you reset your record, and have more time to get the money you need without being punished or experiencing deposession.
Now, can Universal Credit help you get out of debt? Even if it is a no interest loan and it can be the difference between you making it through hard times and starving, it might not be the best idea for refinancing debts. The amount you receive per month is calculated upon minimum wage, so you are likely to spend all the money - or a combination of it and your income, in case you have some - for your monthly expenses. Even if as a loan Universal Credit is interesting, it’s not the best option for getting out of debt. However, it is, indeed, very good so as not to get into debt in the first place. If you get Universal Credit, unless you incur in an emergency, you will no longer need to borrow money from anyone else.
Are there other options?
As you can see, the Universal Credit can be very useful, but it is limited when it comes to paying debts. It does have other disadvantages, like many UK citizens claiming that it can often be difficult to apply for due to bureaucracy issues and the fact that, once it’s approved, you have to wait for at least two months before you start getting the money.
You can visit other sites with information about credits and charities that can help you get out of debt if you are facing some hard times. Community Money Advice is a great organization that gathers many charities and similar NGOs that can help you in such a situation. If you visit their website, you fill find plenty of these organizations along with information and contact data so you can get in touch. Community Money Advice also works together with them providing information, education, resources and even administration software.