Savings limit for Universal Credit explained (£6,000 and £16,000)

• Under £6,000: no effect on Universal Credit.
• £6,000 to £16,000: tariff income reduces UC by £4.35/month for every £250 (or part) above £6,000.
• £16,000 and above: usually no UC entitlement, regardless of income.

DWP rounds your capital above £6,000 up to the next £250 and multiplies by £4.35. For example, savings of £8,300 are treated like this: £8,300 − £6,000 = £2,300, rounded up to ten lots of £250, multiplied by £4.35 = £43.50 deducted each month.

• £6,500 in savings → about £8.70/month deduction
• £10,000 in savings → about £69.60/month deduction
• £15,000 in savings → about £156.60/month deduction
• £16,000+ in savings → usually no UC at all

• Money in current accounts, savings accounts, ISAs and notice accounts
• Premium Bonds and most NS&I products
• Shares, unit trusts and most investments
• Statutory and contractual redundancy pay (once received)
• A second property or buy-to-let
• Money held in trust where you can access it

• The home you live in
• Pension pots before you reach the age you can access them
• Personal possessions (car, furniture, jewellery for everyday use)
• Compensation payments for personal injury (often disregarded for a period)
• Money you've earmarked for a specific purpose like funeral costs, in some cases

The treatment of some payments — insurance pay-outs, court awards, ex-gratia employer payments — depends on the circumstances. Always check before assuming.

Redundancy can push someone over a threshold for the first time. A £10,000 redundancy payment plus £4,000 of existing savings puts you above £16,000 — and may stop your UC entirely. Until the capital drops below £16,000 (through normal living costs, not gifting), UC is usually unavailable. New Style JSA and Council Tax Reduction don't have the same capital limit, so check those.

• Joint account with a partner who's still working: the balance counts for the household and the partner's earnings reduce UC further.
• Redundancy pay sitting in a savings account: counts in full from the day it's paid.
• Pension drawdown taken as a lump sum: usually counts as capital from that point.
• Money lent to a relative: may still count if DWP thinks you can ask for it back.
• Compensation for an accident: often disregarded for up to 52 weeks, sometimes longer in a trust.

• Add up every account, ISA and investment between you and your partner.
• If you're over £16,000, check whether you qualify for New Style JSA, ESA, Council Tax Reduction or Discretionary Housing Payment.
• Don't spend down or gift money to qualify — speak to Citizens Advice first.
• Re-check your eligibility monthly as your savings naturally reduce.