Redundancy support
How savings and redundancy pay affect Universal Credit
5 min read
Universal Credit is means-tested, so savings matter. The rules use two simple thresholds, and the same rules apply whether the money is in a savings account, premium bonds, or as a redundancy lump sum.
The £6,000 and £16,000 thresholds
- Under £6,000: no impact on Universal Credit.
- £6,000 to £16,000: UC reduced by £4.35/month for each £250 (or part) above £6,000.
- Over £16,000: no UC at all.
Don't deliberately spend down
The DWP can apply 'deprivation of capital' rules and treat money you spent unreasonably as if you still had it. Using redundancy pay for normal bills, food, mortgage or rent is fine. Buying expensive items or gifting money to family is risky.
See what you may be entitled to
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Frequently asked questions
Sources
See our methodology for how we use these sources.
Related reading
Redundancy support hub
Calm step-by-step guidance for the weeks after redundancy.
How statutory redundancy pay works in the UK
Who qualifies for statutory redundancy pay, how it's calculated, the weekly pay cap, and when it's tax-free.
Benefits after redundancy: what you may be able to claim
An overview of UK benefits to consider after redundancy — Universal Credit, New Style JSA, Council Tax Reduction, and contribution-based options.
How much savings can I have on Universal Credit?
A calm, comprehensive UK guide to savings and Universal Credit — the £6,000 and £16,000 thresholds, tariff income, what counts as capital, what doesn't, and how inheritance, ISAs and redundancy money are treated. Updated for 2026/27.
How redundancy pay affects Universal Credit (PILON, savings, timing)
How statutory and enhanced redundancy pay, PILON, holiday pay and final salary are treated by Universal Credit — capital vs earnings, assessment-period timing and worked examples. 2026/27 rules.