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Universal Credit

Savings and Universal Credit explained

5 min read · Updated 26 May 2026

Savings rules trip up a lot of Universal Credit claims. The thresholds themselves are simple, but it's not always obvious what counts as 'capital'. This guide explains how the rules usually work.

The two key thresholds

  • Under £6,000 — your savings are ignored.
  • £6,000–£16,000 — every £250 (or part) above £6,000 reduces your monthly UC by £4.35.
  • Over £16,000 — you usually can't claim UC.
These thresholds apply to your whole household. If you have a partner, their savings count too.

What counts as capital

  • Cash, current accounts and savings accounts
  • ISAs and most investments
  • Premium Bonds and shares
  • Second properties (not your main home)
  • Most redundancy lump sums

What usually doesn't count

  • The home you live in
  • Personal possessions
  • Pension pots you haven't started drawing from (working-age claims)
  • Business assets for self-employment, in some cases

Deprivation of capital

If DWP think you've spent or given away savings to qualify for UC, they can treat you as still having that money (called 'notional capital'). Normal living costs, bills and reasonable purchases are fine — but suddenly buying expensive items or giving cash to family can cause issues.

If you're near the £16,000 threshold, get advice from Citizens Advice before spending or moving large sums.

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Frequently asked questions

Sources and further reading

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Common situations

People reading this guide often find one of these situations close to theirs.

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