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.
Savings and Universal Credit explained
How savings, capital and assets affect Universal Credit in the UK, including the £6,000 and £16,000 thresholds and what counts as capital.
Does redundancy pay affect Universal Credit?
How statutory redundancy pay, contractual top-ups and payment in lieu of notice are treated when you claim Universal Credit in the UK.