Universal Credit
Savings and Universal Credit: what counts and what it costs
Three numbers and a long list: the limits, the monthly deduction, and what the DWP treats as capital.
Checked by Radif Partners · Editorial policy · How we calculate
Universal Credit ignores the first £6,000 of savings and other capital. Between £6,000 and £16,000, the award is cut by £4.35 a month for every £250 above £6,000, with another £4.35 for any part of £250 left over: £7,000 in the bank costs £17.40 a month, £12,000 costs £104.40. Above £16,000 no Universal Credit is paid at all. The limits are the same for a single person and a couple, whose savings are added together, and they have not changed for 2026/27. Capital means cash, every bank and building society account including the current account, ISAs, Premium Bonds, shares, crypto, and property you own but do not live in. Your own home, personal possessions and savings held in your children’s names are ignored, and some compensation and benefit arrears are disregarded for a time. Wages left unspent at the end of the following assessment period become savings too.
What your savings take off Universal Credit
Taken off each month
£52.20
| Blocks of £250 (or part) counted | 12 |
| Over a year | £626.40 |
| Room before the upper limit | £7,000 |
How the deduction is worked out
The DWP does not care what interest your savings actually earn. It assumes an income of £4.35 a month for every £250 or part of £250 between £6,000 and £16,000, and takes that from your award pound for pound, after the earnings taper. GOV.UK’s own examples: Sam has £6,300, which is £300 over, counted as two blocks, so £8.70 a month comes off. Leeroy has £14,500, £8,500 over, which is 34 blocks and £147.90 a month. Helen has £17,000 and cannot get Universal Credit.
| Savings | Taken off a month | Taken off a year |
|---|---|---|
| £6,000 | £0.00 | £0.00 |
| £6,250 | £4.35 | £52.20 |
| £7,500 | £26.10 | £313.20 |
| £9,000 | £52.20 | £626.40 |
| £10,000 | £69.60 | £835.20 |
| £12,500 | £113.10 | £1,357.20 |
| £15,000 | £156.60 | £1,879.20 |
| £16,000 | £174.00 | £2,088.00 |
At the top of the band, £16,000 of savings costs £174.00 a month. One pound more and the award goes from that reduced amount to nothing, so a household hovering near the limit should keep a close eye on interest payments and refunds.
A year of savings in one example
Priya and Tom have £11,200 put aside when Tom loses his job. Their savings cost them £91.35 of Universal Credit each month. As they live on part of the money, the deduction shrinks step by step: at £9,000 it is £52.20, at £7,000 it is £17.40, and below £6,000 it disappears. Each fall in savings is a change to report, and the award follows from the assessment period in which it happened. Savings held at exactly £6,000 or less never reduce the award, however long the claim lasts.
What the DWP counts
All money, savings and investments owned in the UK or abroad, by you alone or jointly, are capital. GOV.UK’s list includes:
- cash, current accounts, digital accounts and every type of savings account, including Help to Save, credit union and NS&I accounts;
- ISAs of all kinds, including Lifetime and Help to Buy ISAs, Premium Bonds, shares, dividends and cryptoassets;
- property and land you own but do not live in, such as a flat you let out or a share of a relative’s home where your name is on the mortgage;
- inheritances, money held in trust in most cases, and money in your name that belongs to someone else;
- savings for building work or medical care, and unspent benefits such as Child Benefit or PIP.
Debts are not subtracted. A £9,000 savings account and a £9,000 credit card balance count as £9,000 of capital, which is why paying off the card can be the right move.
What is ignored
| Ignored | For how long |
|---|---|
| The home you live in, and personal possessions | Always |
| Savings in your children’s own names (Junior ISA, Child Trust Fund) | Always |
| Unpaid life insurance policies and funeral plan contracts | Always |
| Payments from listed compensation schemes (infected blood, Grenfell, Post Office Horizon, Windrush and others) | Always |
| Personal injury or illness compensation | 12 months, then only if held in a trust or annuity |
| Arrears of benefits, Bereavement Support Payment, council welfare payments | 12 months |
| Proceeds from selling your home, home repair grants or loans | 6 months, can be extended |
| Assets of a business you still run, or closed recently | While trading, then 6 months |
You still have to declare most of these so the DWP can apply the disregard; only the first rows on life insurance, funeral plans, children’s savings and a working business need not be reported.
When wages become savings
Income is counted as income in the assessment period it arrives. If any of it is still unspent at the end of the next assessment period, it becomes capital. GOV.UK’s example: Katie’s periods run from the 8th to the 7th. Paid £2,000 on 1 April, she has spent £1,500 by 7 May, so from the period starting 8 May the remaining £500 is part of her savings. Tax refunds count as income in the same way. For most people this only matters near the £6,000 line.
Couples, and people moved from tax credits
A couple’s capital is added together, and the limits do not double: £16,000 is the ceiling for the household even if only one partner is eligible for Universal Credit. If you separate, report it, and your own savings are then assessed alone. People who moved to Universal Credit from tax credits after a Migration Notice letter can have different savings rules for a period; the letter and the DWP guidance on transitional protection explain them. Those over State Pension age usually claim Pension Credit instead, which has its own rules, set out in the Pension Credit savings page.