How to Talk to Your Lender About Financial Hardship

From April 2026, families on Universal Credit have gained the right to claim support for all their children, not just the first two. If you're a parent, this could mean hundreds of pounds extra each month. Here's what you need to know, and what to do about it.

For the past nine years, families on Universal Credit faced a harsh rule: the government would only pay the Child Element (extra money for each child) for your first two children. If you had a third child or more, you received nothing for them. This affected hundreds of thousands of families, pushing many deeper into poverty. But from April 2026, that limit has been completely removed.

If you're a parent or carer on Universal Credit, this is genuinely significant news. It means extra money in your pocket if your claim hasn't already been updated automatically. We're talking about an average of £450 per month for the families affected. That's real money that changes how families eat, heat their homes, and plan for the future.

What was the two-child limit, and why did it exist?

The two-child limit was introduced in 2017 as a cost-cutting measure. The thinking went like this: the government would pay the Child Element for your first two children, but not for any born after 5 April 2017 (with narrow exceptions for multiple births and some cases of non-consensual conception). This meant that third children onwards received zero pounds per month from Universal Credit, even though they had exactly the same needs as the first two.

The impact was enormous. By the time it was scrapped, roughly 570,000 households were losing out because of this rule. Parents made impossible choices: they stretched resources thinner, fell behind on bills, or went without themselves so their children could eat.

This wasn't about how much you earned or your circumstances; it was simply about the order your children were born in. That fundamental unfairness is now gone.

What's the Child Element, and how much will you get?

The Child Element is the extra money Universal Credit pays you for each child you're responsible for. It's designed to help with the actual costs of bringing up a child: food, clothing, schooling, childcare. It's separate from Child Benefit (which is a different payment and was never restricted to two children).

From April 2026, you receive £292.81 per child, per month. That's £3,514 per year for each child. If you have three children, that's now £878.43 per month across all three. If you have five, it's £1,464.05 per month.

This applies to all children from newborns right up until they turn 16 (or 20 if they're in approved education or training).

How much extra money could your family get?

The government estimates that 570,000 households will see an increase in their Universal Credit payments because of this change. On average, these families will gain £450 per month, or £5,400 per year. That's substantial.

  • Family with three children: gain £292.81 per month (£3,514 per year) for the third child

  • Family with four children: gain £585.62 per month (£7,028 per year) for the third and fourth children combined

  • Family with five children: gain £878.43 per month (£10,542 per year) for the third, fourth, and fifth children combined

For many families, this is the difference between managing and struggling. Money for a weekly shop, a school trip, new uniforms, or simply breathing room in the budget.

Has your claim been automatically updated?

The Department for Work and Pensions (DWP) has been updating claims automatically from April 2026 onwards. If you're on Universal Credit and have a third child (or more) born after 5 April 2017, your claim should already show the additional Child Element in your payment amount.

However, the system can be slow, and not every claim has been automatically updated yet. Most payments are done automatically if your details are completely up to date on the system. But if something's not been flagged correctly, or if there's a gap in your records, your claim might still show the old amount.

You can check this yourself without needing to contact anyone. Log into your Universal Credit account online and look at your current payment amount. Does it include money for all your children?

What if your claim hasn't been updated by May?

If you've checked your account and the extra Child Element isn't showing up, you shouldn't just wait and hope it gets fixed. By May 2026, if your payment still doesn't include support for all your children, it's time to get in touch.

  • Through your journal: If you have a Universal Credit account online, you can send a message directly to your work coach through the journal. Explain that you have children born after April 2017 who aren't included in your Child Element, and ask them to update your claim.

  • By calling the helpline: Phone Universal Credit on 0800 328 5644 (this is a free call from landlines and most mobile phones). You'll need your National Insurance number ready.

Don't feel like you're bothering anyone by asking. This is your entitlement, and the system has a responsibility to get it right.

What about Child Benefit? Has that changed?

No. Child Benefit was never affected by the two-child limit. Child Benefit is a separate payment that applies to all children in your household, regardless of how many you have. It's always been available for every child from birth to age 16 (or 20 in certain circumstances).

You can claim Child Benefit whether you're on Universal Credit or not, and whether you're working or not. The two things are completely separate. This change to Universal Credit doesn't touch Child Benefit at all.

What impact will this have across the country?

This change is expected to have a real impact on child poverty. The government's own analysis suggests that by 2030/31, there will be approximately 450,000 fewer children in relative poverty as a direct result of removing this limit.

For families right now, the effect is immediate. Nearly half a million households suddenly have more money each month. Schools will see fewer children arriving without lunch money. Food banks will see slightly fewer visits from parents with larger families.

This change acknowledges something that seems obvious but has been ignored for nine years: children have needs regardless of when they're born, and they deserve support equally.

Where Mona Fits

Mona is here to help you make sense of this change, understand how much extra you should be receiving, and plan how this money fits into your family budget. She can help you think through the numbers, understand how this affects your household, and work out what to do next.

However, Mona is a coach, not an executor. She can help you understand the change and plan your next steps, but she won't contact the DWP on your behalf or fill in forms. Those are things you'll need to do yourself, or with support from a local Citizens Advice bureau if you need hands-on help.

The Bottom Line

From April 2026, the rule that limited support to just your first two children is gone. If you have more children on Universal Credit, you should now be receiving the Child Element for all of them. For most families, that means £292.81 per child, per month. If your claim hasn't been automatically updated yet, contact Universal Credit by May to make sure you receive what you're entitled to.

Start with Mona today.

Information correct as of 16 April 2026. For regulated financial guidance, visit MoneyHelper.org.uk.Most people suffer through financial stress in silence because they don’t know lenders actually want to help - it’s cheaper for them to work with you than drag you to court. The right words, the right timing, and the right expectations can unlock support that stops the spiral before it starts. Here’s exactly what to say.

What are the lender’s legal obligations under FCA rules?

The Financial Conduct Authority requires lenders to treat customers in financial difficulty with ‘forbearance’ - which means they must be willing to work with you. They can’t simply refuse to engage or force you into a situation that makes your hardship worse. They must assess your situation fairly and offer proportionate support.

This applies to all regulated lenders: banks, credit card companies, personal loan providers, and most mainstream lenders. What they won’t do is write off debt or give you free money. But they can pause payments, freeze interest, extend terms, or reduce payments temporarily. This is genuinely available to most people - the trick is asking for it in a way that makes the lender take you seriously.

When should you contact your lender about hardship?

As soon as you know you’ll struggle. Don’t wait until you’ve already missed a payment. Proactive contact means the lender hasn’t already recorded you as late, which means more flexibility. Ideally, contact them when you’ve got about three weeks until the next payment date - enough time to arrange something rather than scramble.

Call during business hours and ask for the ‘hardship’ or ‘vulnerable customer’ team, sometimes called the arrears or retentions department. You won’t reach them immediately, but that’s the right team. Avoid calling on Mondays (busiest) or late Friday afternoon when staff are thinking about the weekend.

What should you actually say to the lender?

Lead with honesty and specificity. Here’s a template: "I’m calling because I’ve hit a temporary financial difficulty and I’m struggling to make my next payment. I’ve been a customer for [time period] and I want to work with you to find a solution rather than default. Can you help me explore my options?"

Then explain what happened - as factually and simply as possible. Say something like: "I had a redundancy last month and I’m in the process of finding new work" or "My car needed a £3,000 repair and it’s eaten my buffer" or "My hours were cut at work and my income’s dropped by 40%." Be specific about the impact: "I can pay £75 instead of my normal £200, but not for the next few months while I find work" or "I need a three-month break to recover."

Avoid: saying you don’t care, blaming the lender, threatening to do anything illegal, or being vague. Don’t say "I can’t pay" - say "I can pay £X" or "I need to pause for Y months."

What should you ask for?

Know what you’re requesting before the call. The most common options are payment holidays (skip one or more months, resume after), reduced payments (pay £75 instead of £200 for a period), frozen interest (stop accruing new interest while you repay), or an extended term (spread payments over longer so each one is smaller).

Different lenders offer different options. Some will freeze interest, some won’t. Some offer three-month payment holidays, others up to six. Ask what’s available: "What options do you have for customers in temporary hardship?" Listen to what they say and pick what works for your situation.

Don’t ask for debt forgiveness or write-offs - you won’t get them. Do ask what happens after the support period ends. Will payments resume normally, or will the arrangement be reviewed? This matters because you want to know what you’re committing to.

How should you document the conversation?

Write down the lender’s name, department, the date, time, and what was agreed - immediately after the call. Send a follow-up email summarizing: "I spoke with [name] at [time] on [date]. We agreed that my payment would be [reduced/paused] from [date] to [date]. Interest will be [frozen/paused/continue]. My account will return to normal payments of [amount] on [date]. Please confirm this matches our discussion."

Keep records of every communication. If the lender says they’ll send something by post, follow up in writing if it doesn’t arrive. This paper trail protects you if the lender later claims the arrangement didn’t exist or disputes what was agreed.

What if they refuse to help?

Push back respectfully. Say: "I want to work with you to resolve this. What options are available to someone in my situation?" Ask to speak to a supervisor. Ask for the complaints procedure. If the lender truly refuses to engage on hardship, you might have grounds to complain to the Financial Ombudsman Service.

You can also seek free debt advice from StepChange or Citizens Advice - they can advise whether the lender is breaking FCA rules and help you push back. Sometimes a letter from a debt adviser carries more weight than a customer call.

What’s a reasonable request for hardship support?

A payment holiday for a few months is reasonable and normally granted. A permanently reduced payment is harder to argue for unless you can show your income has permanently dropped. A frozen interest period is increasingly expected and harder for the lender to refuse. An extended term (stretching repayment over a longer period) is reasonable but usually only for loans, not credit cards.

Asking for something and actually getting it are different things. Be prepared for pushback on some requests. A payment holiday of three months is more likely than six. Frozen interest is more likely if you’re current (haven’t missed payments yet) than if you’re already in arrears.

Should you mention other debts or hardship?

Yes, if it’s relevant and honest. If you’ve got multiple debts and the lender needs to understand why you’re struggling, say so. "I’ve got credit cards, a personal loan, and this account, and my income’s dropped significantly. I’m working with [charity] on a plan, and I’m asking for support across all of them." This shows you’re being organized and serious, not just avoiding one lender.

Don’t exaggerate or lie. Lenders can verify income, and dishonesty ruins trust immediately. If you’ve had a redundancy, you can show a redundancy letter. If your hours have dropped, your payslips prove it.

What happens to your credit file during hardship?

That depends on the arrangement. If you’ve set up a payment holiday or arrangement before missing any payments, some lenders don’t report it to credit agencies - it just looks like an account in good standing. If you’ve already missed payments or you’re already in arrears, the lender might note on your credit file that you’re on a ‘hardship arrangement’ or ‘payment plan.’ This looks better to future lenders than a string of missed payments, but it’s not invisible.

Ask the lender specifically: "Will this arrangement appear on my credit file?" If it will, ask how it will be recorded and for how long. This matters because it affects future borrowing, though getting support now is usually better than the damage of defaulting entirely.

Where Mona Fits

Mona helps you plan your finances and understand your borrowing options so you’re less likely to hit hardship in the first place. Comparing savings rates helps you build an emergency fund. But if hardship does happen, knowing how to talk to lenders - and knowing your rights - is sometimes the most valuable tool you have.

The Bottom Line

Lenders expect some customers to struggle sometimes - that’s why FCA rules exist and why they have hardship teams. The difference between a crisis and a managed problem is usually one conversation. Contact your lender before you miss a payment, be specific about your situation, ask for what you need, and get everything in writing. Most lenders will work with you - they have to, and they know it’s cheaper than court.

If you’re struggling, call your lender today. You have more leverage than you think.

For free debt advice and support, contact StepChange (stepchange.org) or Citizens Advice (citizensadvice.org.uk). Visit MoneyHelper.org.uk for consumer rights and FCA guidance.

Join Mona’s early access waitlist

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How to Talk to Your Lender About Financial Hardship

From April 2026, families on Universal Credit have gained the right to claim support for all their children, not just the first two. If you're a parent, this could mean hundreds of pounds extra each month. Here's what you need to know, and what to do about it.

For the past nine years, families on Universal Credit faced a harsh rule: the government would only pay the Child Element (extra money for each child) for your first two children. If you had a third child or more, you received nothing for them. This affected hundreds of thousands of families, pushing many deeper into poverty. But from April 2026, that limit has been completely removed.

If you're a parent or carer on Universal Credit, this is genuinely significant news. It means extra money in your pocket if your claim hasn't already been updated automatically. We're talking about an average of £450 per month for the families affected. That's real money that changes how families eat, heat their homes, and plan for the future.

What was the two-child limit, and why did it exist?

The two-child limit was introduced in 2017 as a cost-cutting measure. The thinking went like this: the government would pay the Child Element for your first two children, but not for any born after 5 April 2017 (with narrow exceptions for multiple births and some cases of non-consensual conception). This meant that third children onwards received zero pounds per month from Universal Credit, even though they had exactly the same needs as the first two.

The impact was enormous. By the time it was scrapped, roughly 570,000 households were losing out because of this rule. Parents made impossible choices: they stretched resources thinner, fell behind on bills, or went without themselves so their children could eat.

This wasn't about how much you earned or your circumstances; it was simply about the order your children were born in. That fundamental unfairness is now gone.

What's the Child Element, and how much will you get?

The Child Element is the extra money Universal Credit pays you for each child you're responsible for. It's designed to help with the actual costs of bringing up a child: food, clothing, schooling, childcare. It's separate from Child Benefit (which is a different payment and was never restricted to two children).

From April 2026, you receive £292.81 per child, per month. That's £3,514 per year for each child. If you have three children, that's now £878.43 per month across all three. If you have five, it's £1,464.05 per month.

This applies to all children from newborns right up until they turn 16 (or 20 if they're in approved education or training).

How much extra money could your family get?

The government estimates that 570,000 households will see an increase in their Universal Credit payments because of this change. On average, these families will gain £450 per month, or £5,400 per year. That's substantial.

  • Family with three children: gain £292.81 per month (£3,514 per year) for the third child

  • Family with four children: gain £585.62 per month (£7,028 per year) for the third and fourth children combined

  • Family with five children: gain £878.43 per month (£10,542 per year) for the third, fourth, and fifth children combined

For many families, this is the difference between managing and struggling. Money for a weekly shop, a school trip, new uniforms, or simply breathing room in the budget.

Has your claim been automatically updated?

The Department for Work and Pensions (DWP) has been updating claims automatically from April 2026 onwards. If you're on Universal Credit and have a third child (or more) born after 5 April 2017, your claim should already show the additional Child Element in your payment amount.

However, the system can be slow, and not every claim has been automatically updated yet. Most payments are done automatically if your details are completely up to date on the system. But if something's not been flagged correctly, or if there's a gap in your records, your claim might still show the old amount.

You can check this yourself without needing to contact anyone. Log into your Universal Credit account online and look at your current payment amount. Does it include money for all your children?

What if your claim hasn't been updated by May?

If you've checked your account and the extra Child Element isn't showing up, you shouldn't just wait and hope it gets fixed. By May 2026, if your payment still doesn't include support for all your children, it's time to get in touch.

  • Through your journal: If you have a Universal Credit account online, you can send a message directly to your work coach through the journal. Explain that you have children born after April 2017 who aren't included in your Child Element, and ask them to update your claim.

  • By calling the helpline: Phone Universal Credit on 0800 328 5644 (this is a free call from landlines and most mobile phones). You'll need your National Insurance number ready.

Don't feel like you're bothering anyone by asking. This is your entitlement, and the system has a responsibility to get it right.

What about Child Benefit? Has that changed?

No. Child Benefit was never affected by the two-child limit. Child Benefit is a separate payment that applies to all children in your household, regardless of how many you have. It's always been available for every child from birth to age 16 (or 20 in certain circumstances).

You can claim Child Benefit whether you're on Universal Credit or not, and whether you're working or not. The two things are completely separate. This change to Universal Credit doesn't touch Child Benefit at all.

What impact will this have across the country?

This change is expected to have a real impact on child poverty. The government's own analysis suggests that by 2030/31, there will be approximately 450,000 fewer children in relative poverty as a direct result of removing this limit.

For families right now, the effect is immediate. Nearly half a million households suddenly have more money each month. Schools will see fewer children arriving without lunch money. Food banks will see slightly fewer visits from parents with larger families.

This change acknowledges something that seems obvious but has been ignored for nine years: children have needs regardless of when they're born, and they deserve support equally.

Where Mona Fits

Mona is here to help you make sense of this change, understand how much extra you should be receiving, and plan how this money fits into your family budget. She can help you think through the numbers, understand how this affects your household, and work out what to do next.

However, Mona is a coach, not an executor. She can help you understand the change and plan your next steps, but she won't contact the DWP on your behalf or fill in forms. Those are things you'll need to do yourself, or with support from a local Citizens Advice bureau if you need hands-on help.

The Bottom Line

From April 2026, the rule that limited support to just your first two children is gone. If you have more children on Universal Credit, you should now be receiving the Child Element for all of them. For most families, that means £292.81 per child, per month. If your claim hasn't been automatically updated yet, contact Universal Credit by May to make sure you receive what you're entitled to.

Start with Mona today.

Information correct as of 16 April 2026. For regulated financial guidance, visit MoneyHelper.org.uk.Most people suffer through financial stress in silence because they don’t know lenders actually want to help - it’s cheaper for them to work with you than drag you to court. The right words, the right timing, and the right expectations can unlock support that stops the spiral before it starts. Here’s exactly what to say.

What are the lender’s legal obligations under FCA rules?

The Financial Conduct Authority requires lenders to treat customers in financial difficulty with ‘forbearance’ - which means they must be willing to work with you. They can’t simply refuse to engage or force you into a situation that makes your hardship worse. They must assess your situation fairly and offer proportionate support.

This applies to all regulated lenders: banks, credit card companies, personal loan providers, and most mainstream lenders. What they won’t do is write off debt or give you free money. But they can pause payments, freeze interest, extend terms, or reduce payments temporarily. This is genuinely available to most people - the trick is asking for it in a way that makes the lender take you seriously.

When should you contact your lender about hardship?

As soon as you know you’ll struggle. Don’t wait until you’ve already missed a payment. Proactive contact means the lender hasn’t already recorded you as late, which means more flexibility. Ideally, contact them when you’ve got about three weeks until the next payment date - enough time to arrange something rather than scramble.

Call during business hours and ask for the ‘hardship’ or ‘vulnerable customer’ team, sometimes called the arrears or retentions department. You won’t reach them immediately, but that’s the right team. Avoid calling on Mondays (busiest) or late Friday afternoon when staff are thinking about the weekend.

What should you actually say to the lender?

Lead with honesty and specificity. Here’s a template: "I’m calling because I’ve hit a temporary financial difficulty and I’m struggling to make my next payment. I’ve been a customer for [time period] and I want to work with you to find a solution rather than default. Can you help me explore my options?"

Then explain what happened - as factually and simply as possible. Say something like: "I had a redundancy last month and I’m in the process of finding new work" or "My car needed a £3,000 repair and it’s eaten my buffer" or "My hours were cut at work and my income’s dropped by 40%." Be specific about the impact: "I can pay £75 instead of my normal £200, but not for the next few months while I find work" or "I need a three-month break to recover."

Avoid: saying you don’t care, blaming the lender, threatening to do anything illegal, or being vague. Don’t say "I can’t pay" - say "I can pay £X" or "I need to pause for Y months."

What should you ask for?

Know what you’re requesting before the call. The most common options are payment holidays (skip one or more months, resume after), reduced payments (pay £75 instead of £200 for a period), frozen interest (stop accruing new interest while you repay), or an extended term (spread payments over longer so each one is smaller).

Different lenders offer different options. Some will freeze interest, some won’t. Some offer three-month payment holidays, others up to six. Ask what’s available: "What options do you have for customers in temporary hardship?" Listen to what they say and pick what works for your situation.

Don’t ask for debt forgiveness or write-offs - you won’t get them. Do ask what happens after the support period ends. Will payments resume normally, or will the arrangement be reviewed? This matters because you want to know what you’re committing to.

How should you document the conversation?

Write down the lender’s name, department, the date, time, and what was agreed - immediately after the call. Send a follow-up email summarizing: "I spoke with [name] at [time] on [date]. We agreed that my payment would be [reduced/paused] from [date] to [date]. Interest will be [frozen/paused/continue]. My account will return to normal payments of [amount] on [date]. Please confirm this matches our discussion."

Keep records of every communication. If the lender says they’ll send something by post, follow up in writing if it doesn’t arrive. This paper trail protects you if the lender later claims the arrangement didn’t exist or disputes what was agreed.

What if they refuse to help?

Push back respectfully. Say: "I want to work with you to resolve this. What options are available to someone in my situation?" Ask to speak to a supervisor. Ask for the complaints procedure. If the lender truly refuses to engage on hardship, you might have grounds to complain to the Financial Ombudsman Service.

You can also seek free debt advice from StepChange or Citizens Advice - they can advise whether the lender is breaking FCA rules and help you push back. Sometimes a letter from a debt adviser carries more weight than a customer call.

What’s a reasonable request for hardship support?

A payment holiday for a few months is reasonable and normally granted. A permanently reduced payment is harder to argue for unless you can show your income has permanently dropped. A frozen interest period is increasingly expected and harder for the lender to refuse. An extended term (stretching repayment over a longer period) is reasonable but usually only for loans, not credit cards.

Asking for something and actually getting it are different things. Be prepared for pushback on some requests. A payment holiday of three months is more likely than six. Frozen interest is more likely if you’re current (haven’t missed payments yet) than if you’re already in arrears.

Should you mention other debts or hardship?

Yes, if it’s relevant and honest. If you’ve got multiple debts and the lender needs to understand why you’re struggling, say so. "I’ve got credit cards, a personal loan, and this account, and my income’s dropped significantly. I’m working with [charity] on a plan, and I’m asking for support across all of them." This shows you’re being organized and serious, not just avoiding one lender.

Don’t exaggerate or lie. Lenders can verify income, and dishonesty ruins trust immediately. If you’ve had a redundancy, you can show a redundancy letter. If your hours have dropped, your payslips prove it.

What happens to your credit file during hardship?

That depends on the arrangement. If you’ve set up a payment holiday or arrangement before missing any payments, some lenders don’t report it to credit agencies - it just looks like an account in good standing. If you’ve already missed payments or you’re already in arrears, the lender might note on your credit file that you’re on a ‘hardship arrangement’ or ‘payment plan.’ This looks better to future lenders than a string of missed payments, but it’s not invisible.

Ask the lender specifically: "Will this arrangement appear on my credit file?" If it will, ask how it will be recorded and for how long. This matters because it affects future borrowing, though getting support now is usually better than the damage of defaulting entirely.

Where Mona Fits

Mona helps you plan your finances and understand your borrowing options so you’re less likely to hit hardship in the first place. Comparing savings rates helps you build an emergency fund. But if hardship does happen, knowing how to talk to lenders - and knowing your rights - is sometimes the most valuable tool you have.

The Bottom Line

Lenders expect some customers to struggle sometimes - that’s why FCA rules exist and why they have hardship teams. The difference between a crisis and a managed problem is usually one conversation. Contact your lender before you miss a payment, be specific about your situation, ask for what you need, and get everything in writing. Most lenders will work with you - they have to, and they know it’s cheaper than court.

If you’re struggling, call your lender today. You have more leverage than you think.

For free debt advice and support, contact StepChange (stepchange.org) or Citizens Advice (citizensadvice.org.uk). Visit MoneyHelper.org.uk for consumer rights and FCA guidance.

Join Mona’s early access waitlist

Join the waitlist

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