Universal Credit savings limit rules all new and existing claimants should know. People claiming Universal Credit are being reminded that savings and capital can affect benefit payments, with strict rules in place once amounts rise above certain thresholds.
How Savings Affect Universal Credit
Universal Credit is a means-tested benefit, meaning the amount someone receives depends on their financial circumstances, including earnings, savings and other capital. Under Department for Work and Pensions (DWP) rules, people with savings of more than £16,000 are usually not eligible for Universal Credit.
Meanwhile, savings above £6,000 can reduce the amount someone receives each month. Guidance on GOV.UK explains if a claimant or their partner has between £6,000 and £16,000 in savings or capital, their Universal Credit payments will be reduced gradually.
The DWP treats every £250, or part of £250, above the £6,000 threshold as generating monthly income which reduces a claimant's award.
What Counts as Savings or Capital
Savings and capital can include:
- Money held in bank or building society accounts
- Cash savings
- ISAs
- Premium bonds
- Lump sum payments
- Inherited money
- Some investments
Joint savings held with another person may also be taken into account as part of a Universal Credit claim.
Reporting Changes
People claiming Universal Credit are expected to report changes to their savings through their online Universal Credit account. Failing to report changes promptly could result in overpayments which may later need to be repaid.
Some forms of capital may be ignored for a period of time under DWP rules. For example, compensation payments, insurance payouts or money from the sale of a home may sometimes be temporarily disregarded depending on individual circumstances. Certain pension savings may also not count while someone is below State Pension age and has not started taking money from their pension pot.
Universal Credit Overview
Universal Credit is designed to help people with living costs if they are on a low income, out of work or unable to work. New figures published by the DWP on Tuesday indicate there are now 8.3 million people in claim for the benefit.
The amount someone receives can also depend on housing costs, childcare expenses, health conditions and whether they have children.
People unsure how savings or lump sum payments could affect their Universal Credit claim should check the latest guidance on GOV.UK or get benefits advice from non-profit organisations such as Citizen's Advice or Turn2Us. More information about Universal Credit savings and capital rules is available through GOV.UK.
