New DWP guidance explains how Universal Credit claimants with savings over £6,000 could see their payments reduced, and what capital may be temporarily disregarded
Universal Credit is a means-tested benefit, meaning the amount a recipient receives is determined by their financial situation, including earnings, savings and other capital. Under Department for Work and Pensions (DWP) rules, those with savings exceeding £16,000 are generally ineligible for Universal Credit.
Furthermore, savings above £6,000 can reduce the monthly amount someone receives. Guidance on GOV.UK states that if a claimant or their partner holds between £6,000 and £16,000 in savings or capital, their Universal Credit payments will be incrementally reduced.
The DWP treats every £250, or part of £250, above the £6,000 threshold as generating monthly income which reduces a claimant’s award.
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, reports the Daily Record.
Those claiming Universal Credit are required to report any changes to their savings via their online Universal Credit account. Failing to report changes promptly could result in overpayments which may later need to be repaid.
Certain forms of capital may be disregarded for a period of time under DWP rules. For instance, compensation payments, insurance payouts or money from the sale of a home may occasionally be temporarily discounted depending on individual circumstances.
Specific pension savings may also be exempt while someone is below State Pension age and has yet to begin drawing from their pension pot. Universal Credit is intended to assist those on a low income, out of work, or unable to work with their everyday living costs. Newly released figures from the DWP, published on Tuesday, reveal that 8.3 million people are currently claiming the benefit.
The sum an individual receives may also vary depending on housing costs, childcare expenses, health conditions and whether they have dependent children.
Those uncertain about how savings or lump sum payments might affect their Universal Credit claim are encouraged to consult the latest guidance on GOV.UK, or seek benefits advice from non-profit organisations such as Citizens Advice or Turn2Us.
Further details regarding Universal Credit savings and capital rules can be found through GOV.UK[dot].



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