How much you can save without it affecting your Universal Credit

If you are on Universal Credit (UC), having savings does not automatically mean you lose your payments. The DWP has a set of rules called the capital rules that decide exactly how your savings affect your UC — and there is a useful buffer before anything changes.

Up to £6,000: no effect on your UC

If you, and your partner if you have one, have savings and assets worth less than £6,000 in total, your UC is not reduced at all. This is called the lower capital limit.

A deposit refund from an old home, a tax rebate, or cash sitting in a savings account all count as capital. As long as the total stays below £6,000, they do not reduce what you get.

Between £6,000 and £16,000: a small reduction

With savings in this range, the DWP does not take them away from your UC directly. Instead, it assumes you earn a small "tariff income" from them.

For every £250 — or part of £250 — that you have above £6,000, your monthly UC falls by £4.35.

Here is how that works in practice. Say you have £8,000 saved. That is £2,000 above the £6,000 lower limit. Divide £2,000 by £250: that is 8 lots of £250. Multiply 8 by £4.35 and you get £34.80. So your UC goes down by £34.80 a month — not the full amount of the savings.

You can still claim UC in this range. The reduction is gradual.

Above £16,000: you cannot claim UC

If your total savings and assets go above £16,000, you are not eligible to claim UC. This is the upper capital limit.

If your savings later fall back below £16,000, you can make a new claim.

What counts as capital?

The rules cover more than just cash in a bank. DWP counts:

• Savings accounts, current accounts, and ISAs
• Premium Bonds
• Shares and stocks
• Property you own but do not live in

Your home — the property you live in as your main home — does not count as capital for UC purposes.

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Joint claims

If you and a partner make a joint UC claim, your combined savings count. So if you have £4,000 and your partner has £3,000, that is £7,000 between you — above the lower limit, so a small tariff income applies.

Saving for a rental deposit

If you are renting privately and putting money aside for a deposit on your next home, that money still counts as capital. Try to keep it below £6,000 if you can, so it does not reduce your UC.

Tell DWP about changes

If your savings go up or down significantly, you must report the change through your UC online journal. Staying on top of this helps you avoid an overpayment, which you would have to pay back later. If you are unsure what to report or when, Citizens Advice can help.