Universal Credit: money, savings and investments
How Universal Credit is affected by having money, savings and investments. We call this ‘capital’.
Applies to England, Scotland and Wales
What we take into account
When we assess your entitlement to Universal Credit, we take into account as ‘capital’ the value of all money, savings and investments you own, or you jointly own with someone else.
The amount of money, savings and investments you (and your partner) have can affect:
- whether you’re eligible for Universal Credit
- how much Universal Credit you receive
All money, savings and investments you have in the UK and abroad are taken into account, including:
- cash
- money in your bank account, including your main bank account
- current accounts and digital-only accounts such as PayPal
- savings accounts: bank, building society, credit union, Help to Save, Post Office and National Savings and Investments (NS&I) accounts
- savings for children in your name
- money that belongs to someone else, but is in your name
- savings for essential building work (unless from a grant or loan)
- savings for medical care
- Individual Savings Accounts (ISAs): cash, stocks and shares, Innovative Finance, Help to Buy, and Lifetime ISAs
- Premium Bonds, dividends, stocks and shares
- cryptoassets
- property you own but do not live in yourself (apart from in certain circumstances)
- property, land and savings abroad
- inheritance payments
- business accounts and assets for businesses that closed over 6 months ago
- money in trust funds, apart from in certain circumstances
- unspent benefits, for example Child Benefit, Personal Independence Payment (PIP) and Disability Living Allowance (DLA)
- unspent income
We do not take your debt into account when we work out your total money, savings and investments.
If you live with your partner
Your combined money, savings and investments are taken into account even if your partner is not eligible for Universal Credit.
What’s not counted as money, savings and investments
Your personal possessions are not taken into account.
Some types of money, savings, investments or other assets might not affect your claim for Universal Credit. You still need to tell us about these so we can decide whether to take them off your overall money, savings and investments.
You must tell us about:
- personal injury and illness compensation
- special compensation schemes for traumatic events
- welfare support payments
- Bereavement Support Payments (previously Widowed Parent’s Allowance)
- funds from selling your home
- money for tax payments if you’re self-employed
You do not need to tell us about:
- life insurance policies that have not been paid out
- funeral plan contracts
- savings or investments belonging to your children in your children’s name. Read more about Universal Credit and children’s savings
- business accounts and assets for businesses that are still operating or have closed in the last 6 months
Income
Your income is counted as savings if it has not been spent by the end of the assessment period after the one in which it was received.
Example
Katie’s assessment period for Universal Credit runs from the 8th of the month to the 7th of the next month.
Katie was paid a salary of £2,000 on 1 April. This was within her 8 March to 7 April assessment period.
By the end of her next assessment period (8 April to 7 May), she has spent £1,500 of this income.
For the next assessment period (8 May to 7 June) she should report the saved £500 as part of her savings.
Tax refunds (known as tax rebates) and National Insurance contribution repayments are counted as income.
Property
Property you own and live in
The value of the property you own and live in is not taken into account when assessing your Universal Credit.
Funds from selling your home
You must tell us about funds from the sale of your home, even if you intend to use them to buy another home for yourself. We will not take these funds into account for 6 months. This can be extended under special circumstances.
Grants or loans to repair or alter your home
Grants or loans for essential repairs or adaptations to your main home are not taken into account for 6 months. This can be extended if the repairs or alterations will take more than 6 months.
Property you own, but do not live in
Property in your name that you do not live in is taken into account unless it’s the main home of:
- a close relative who is retired or has a severe health condition
- a former partner who is a lone parent
We need to know about the value of any property that you have a financial interest in, for example:
- holiday homes
- caravans
- land
- property you let out
- property someone else lives in, where your name has been added to the mortgage
For example, if you’ve been added to the mortgage for the home your sister lives in, this home is in your name and will need to be declared.
Business property
Property you own to run a trade, such as a hotel or bed and breakfast, is not taken into account for Universal Credit.
Money, savings and investments limits
To claim Universal Credit you must usually have no more than £16,000 in money, savings and investments as a single claimant or if you are living with a partner.
If you have below £6,000 it will not affect your award.
There are different money, savings and investments eligibility rules if you’ve received a Migration Notice and have been asked to move to Universal Credit.
If you have between £6,000 and £16,000
If you have money, savings and investments between £6,000 and £16,000 your Universal Credit payments will be reduced.
Your payments will be reduced by £4.35 for every £250 you have between £6,000 and £16,000.
Another £4.35 is taken off for any remaining amount that is not a complete £250.
Examples
Sam has savings of £6,300.
She has £300 of savings over the limit of £6,000.
Her Universal Credit is reduced by 2 x £4.35 a month, that’s £8.70.
Leeroy has savings of £14,500.
He has £8,500 of savings over the limit of £6,000.
His Universal Credit is reduced by 34 x £4.35 a month, that’s £147.90.
Helen has savings of £17,000.
She is not eligible for Universal Credit.
Children’s savings
Money, savings and investments that belong to your children, and are in their name, are not taken into account when assessing your Universal Credit. For example, you do not need to tell us about children’s savings accounts in their name such as Junior ISAs and Child Trust Funds.
How to tell us about your money, savings and investments
When you claim Universal Credit
You’ll be asked to tell us about all the money, savings and investments you have when you make your claim. If a type is not listed, for example National Savings certificates, you can let us know using the ‘other savings and investments’ option.
Report changes to your money, savings and investments
You must report changes to your money, savings and investments as soon as they happen. Do this by signing in to your Universal Credit account, ‘report a change of circumstance’ and update your ‘money, savings and investments’.
If you tell us late or you do not report a change, you could get paid too much Universal Credit. This is called an overpayment. You’ll get less Universal Credit each month until you pay back the overpayment.
You must tell us about any change in your money, savings and investments or their value. This may include:
- inheritance payments
- redundancy pay
- pension and life insurance lump sums
- compensation payments
- divorce settlements
- change in value of investments or other assets
Couples and changes of circumstances
If you separate from your partner
In your account you need to ‘report a change of circumstances’ and update your ‘living with a partner’ details. Then you should report any change of circumstances in ‘money, savings and investments’.
If you’re now part of a couple who live together
In your account you need to ‘report a change of circumstances’ and update your ‘living with a partner’ details.
Reducing your money, savings and investments on purpose
If you knowingly reduce your money, savings and investments, or transfer them elsewhere to get or increase your Universal Credit, this is known as ‘deprivation of capital’.
You have not knowingly reduced your money, savings and investments if it has been used to:
- pay off or reduce a debt
- pay for goods and services that were reasonable in your circumstances
If we decide you’ve deliberately reduced your money, savings or investments, your Universal Credit is based on you still having it. This is called ‘notional capital’.
Fraud
You may be prosecuted or need to pay a penalty if you try to affect your Universal Credit award by:
- knowingly reducing your money, savings or investments
- deliberately giving false information about your money, savings or investments
Compensation and welfare support payments
Certain compensation and welfare support payments are not taken into account as savings either indefinitely or up to 12 months.
We’ll need to know details about compensation and welfare payments you’ve received.
Personal injury and illness compensation
Personal injury and illness compensation payments are not taken into account for the first 12 months after you receive them.
After 12 months, only personal injury or illness payments which are put into a trust or used to buy an annuity are not taken into account.
Special compensation schemes
Payments from the following special compensation schemes are not counted as money, savings or investments:
- Child Migrants Trust scheme for former British child migrants
- Grenfell Tower fire on 14 June 2017
- Horizon IT system or Bates and Others v Post Office Ltd from the Post Office or secretary of state
- imprisonment, forced labour, injury, property loss, or loss of a child during World War II
- Institutional Child Abuse in the UK
- London Bombings on 7 July 2005
- Manchester Bombing on 22 May 2017
- National Emergencies Trust
- terrorist attacks in London on 22 March 2017 or 3 June 2017
- Vaccine Damage Payment Scheme
- variant Creutzfeldt-Jacob Disease (vCJD) diagnosis
- Victims of Overseas Terrorism Compensation Scheme
- Victoria Cross or George Cross
- Windrush Compensation Scheme
Welfare support payments
The following welfare support payments are not counted as money, savings or investments for up to 12 months after you receive them:
- benefits arrears payments, with or without compensation for late payment
- Bereavement Support Payments (previously Widowed Parent’s Allowance)
- local council welfare payments under the Children Act, Social Work Act or Social Services and Well-being Act
- Social Fund payments, under the Contributions and Benefits Act
The following Scottish welfare support payments are not counted as money, savings or investments for up to 12 months after you receive them:
- Carer’s Assistance (Young Carer Grants)
- Early Years Assistance
- Funeral Expense Assistance
- Winter Heating Assistance