Definition
Tariff income
Reviewed by BenefitCheck Editorial Team · Updated 18 June 2026
An assumed monthly income Universal Credit adds for every £250 of savings you hold between £6,000 and £16,000.
In plain English
Tariff income is the polite name for the deduction Universal Credit applies when your capital is between £6,000 and £16,000. For every complete £250 above £6,000, UC assumes you earn an extra £4.35 a month and reduces your payment by that amount. Below £6,000 there is no deduction. At £16,000 you stop qualifying altogether.
Why it matters
Most people picture a sudden cliff at £16,000, but the real impact starts at £6,000 and builds slowly. Tariff income explains why your UC payment can shrink in small steps as a redundancy payment is drawn down or savings are added to.
Example
You hold £10,500 in savings. That is £4,500 over the £6,000 floor. £4,500 ÷ £250 = 18 complete bands. UC assumes 18 × £4.35 = £78.30 of monthly income and reduces your payment by that figure.
What people often confuse it with
Actual interest on savings
Real interest you earn is ignored. UC uses the tariff calculation instead.
Income from work
Tariff income is not real income — you have not actually earned it. It is a notional figure used only to reduce your award.
Related definitions
Capital
Money and assets Universal Credit counts towards the £6,000 and £16,000 thresholds — savings, ISAs, Premium Bonds, second properties.
Assessment period
The one-month window Universal Credit uses to measure your income, savings and circumstances before paying you.
Deprivation of capital
Where DWP decides you deliberately reduced your savings to qualify for benefits and treats the money as still yours.