Saving solutions
Question
I work full time and I currently live in a hostel. I'm trying really hard to save the bond and deposit for my own place because I need to get out of the hostel as soon as I can. As it's really quite a struggle, is there any assistance to help me with the deposit and bond?
Answer
You may need to pay a deposit and rent in advance at the start of a tenancy. If you will be claiming housing benefit to help with the rent, then it will be paid in arrears, so you would need to find a month's rent in advance yourself and ask for housing benefit to be paid directly to you in the last month of your tenancy.
It can be difficult to find the money for a deposit and rent in advance if you're on benefits or a low income. But there is potential help available: you may be able to get help with a deposit through a rent deposit scheme; and you might be able to get a Social Fund loan to help with rent in advance.
A rent deposit scheme may be able to help you with your deposit. These schemes either pay your landlord the deposit, or guarantee they will pay for any damage at the end of the tenancy. Such schemes sometimes help with rent in advance. Some will help you to find a property while others will ask you to find the property yourself.
Rent deposit schemes usually have rules about who they can help. For example, many schemes only help people on benefits or a low income. Some schemes are only for young people, and others may not help people who the council has a legal duty to house, such as people with children. Most schemes have limited funding so may not be able to help even if you fit the criteria. Unfortunately, some landlords may also not accept a deposit guarantee from a rent deposit scheme.
Crisis SmartMove gives details of rent deposit schemes around the country. However this site does not list all schemes, so ask at your local council or advice centre to find out if there is anything else in your area.
There are two types of loan that you may be able to get from the Social Fund: a budgeting loan; or a crisis loan. If you get one (which isn't guaranteed), you will have to pay it back. Both of these loans are discretionary so the Benefits Agency or Jobcentre Plus don't have to give you one.
To apply for a budgeting loan, you must have been on benefits for at least 26 weeks. Your chances of getting a loan and how much you might get will depend on your personal circumstances. Budgeting loans can help with expenses such as furniture and household equipment, rent in advance, and removal expenses if necessary.
A crisis loan is an interest-free loan to cover the cost of essential things you can't afford on your regular income. You don't have to be claiming benefits to apply but - again - your chances of getting a loan will depend on your personal circumstances.
If you want to apply for a crisis loan or budgeting loan, you might find it helpful to seek further help from your local Citizens Advice Bureau (CAB) or Housing Aid Centre.
Updated: 07/09/2012
Question answered by Shelter
