Once you have received notice of the claim, you should still respond to the claimant as soon as possible — usually within two weeks of receiving the letter. Failing to respond to the claimant because you know are unable to pay is not a valid excuse. You should always consider speaking directly with the claimant to see if you can come to some sort of arrangement.
A claimant can apply for an enforcement order to recoup their money if you have been given a court order but failed to repay. They can also apply for a court order to make you return to court and provide evidence of your financial situation. You should be aware that if you have no wage coming in, but you do have illiquid assets (e.g., property), these may be considered as part of your ability to pay. If you stand to receive money from an insurance payout, for example, this may also be taken into account.
If you cannot pay, the court could use bailiffs to recover the money, or look to take the debt out of any wages you will receive over a period to be determined by the court (see ‘Can the court take money from wages to pay off a debt?’: https://www.smallclaimsportal.com/help/153-can-the-court-take-money-from-wages)