how much savings can i have on universal credit

Wojciech

Wojciech

Diploma for Financial Advisers
Diploma in Accounting
Member of London Institute of Banking and Finance


If you’re claiming Universal Credit, you might wonder, how much savings can I have on Universal Credit without losing your benefits? Understanding the rules around savings is crucial to avoid surprises. This guide breaks down the savings limits, how they affect your payments, and what counts as “savings” in simple terms.


What Is the Savings Limit for Universal Credit?

Universal Credit has strict rules about savings (called “capital” in official terms). If your savings are too high, you may not qualify for support. Here’s what you need to know:

  1. £16,000 or More: If you have savings over £16,000, you cannot claim Universal Credit. This is a hard limit.
  2. £6,000 to £16,000: If your savings are between £6,000 and £16,000, your Universal Credit payments will reduce. For every £250 (or part of £250) over £6,000, your monthly payment drops by £4.35.
  3. Below £6,000: Savings under £6,000 won’t affect your claim.

For example, if you have £10,000 in savings:

  • £10,000 – £6,000 = £4,000 over the lower limit.
  • £4,000 ÷ £250 = 16 (rounded up).
  • 16 x £4.35 = £69.60 reduction per month.

What Counts as Savings?

Savings aren’t just cash in your bank account. The government looks at:

  • Money in savings or current accounts.
  • Investments (stocks, bonds, crypto).
  • Property you own (except your main home).
  • Lump sums (e.g., inheritance, redundancy pay).

What Doesn’t Count:

  • Personal possessions (cars, jewelry, furniture).
  • Your main home.
  • Payments from certain disability benefits.

Always report changes in savings to avoid penalties.


What Happens If My Savings Go Over the Limit?

If your savings cross £16,000 while claiming Universal Credit, you must report it immediately. Your payments will stop, and you may need to repay any money received after exceeding the limit.

If you’re close to the threshold, plan ahead. For instance, using savings to pay off debt or cover essential costs (like home repairs) could help keep you below the limit.


Special Situations: Windfalls, Gifts, or Inheritance

Unexpected money (e.g., a bonus, gift, or inheritance) can push your savings over the limit. Universal Credit gives you a 32-day “grace period” for lump sums. During this time, the extra money won’t affect your claim. After 32 days, it counts toward your savings.

Use this window to decide how to use the funds. For example, paying off debt or buying essential items could keep your savings under £16,000.


Tips for Managing Savings on Universal Credit

  1. Track Your Savings: Regularly check your accounts to stay below £16,000.
  2. Spend Down Strategically: If nearing the limit, use savings for essential expenses (bills, rent, debts).
  3. Keep Records: Save receipts if you spend savings to prove it was for valid needs.
  4. Get Advice: Talk to a benefits advisor or use a free calculator to estimate how savings affect your payments.

Common Questions About Savings and Universal Credit

Q: Do joint savings count?
A: If you share an account, half the savings count as yours.

Q: What if I have an ISA or pension?
A: ISAs count toward the £16,000 limit. Pensions usually don’t unless you’re withdrawing money.

Q: Can I hide my savings?
A: No. Lying about savings is benefit fraud. You could face fines or prosecution.


Final Thoughts: How Much Savings Can I Have on Universal Credit?

To recap, the answer to how much savings can I have on Universal Credit is £16,000. Between £6,000 and £16,000, your payments reduce gradually. Staying below £6,000 ensures no impact. Always report changes and seek help if unsure.

By understanding these rules, you can manage your savings wisely and keep your Universal Credit support secure. For more details, visit the UK Government’s Universal Credit page or speak to a financial advisor.


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