How much you have in certain savings and assets can determine how much you get from these benefits, or if you’re eligible for it at all
Eligibility for certain DWP benefits can depend on your savings. These are referred to as means-tested benefits, which are only paid to people that have less than a specific amount of capital.
Means-tested benefits and savings limits:
- Universal Credit – £16,000
- Pension Credit – £10,000
- Council Tax Support – dependent on each individual council
- Income-related Employment and Support Allowance – £16,000
- Housing Benefit – £16,000
The exact amount you have in savings will influence how much you receive from these five benefits and whether you’re eligible for payments at all. However, it’s not just cash that contributes towards this limit.
Experts from Money Helper explained that the DWP will examine your entire financial situation, as well as your partner’s in some cases, but not your child’s. This includes cash in any bank or building society accounts, regardless of whether it earns interest.
National Savings & Investments savings accounts, Premium Bonds, stocks and shares, inheritance, and the value of any property you own that isn’t your main home all contribute towards your savings threshold. If you are currently drawing from your pension, this pot might also be considered as savings.
Certain lump-sum payments are also viewed as savings in relation to means-tested benefits. This includes redundancy pay and compensation payouts.
However, some special compensations have been specifically excluded from these calculations, such as the payments made through the Infected Blood Compensation Scheme. And some items and assets are ‘disregarded’ by the DWP. More information can be found on the Gov.uk website.
Disregarded savings and assets:
- Personal possessions like jewellery, furniture, and cars
- Pension pots you haven’t taken money from yet
- Pre-paid funeral plans
- Life insurance policies that haven’t been cashed in
- Insurance claims if it’s being used to replace or repair something
You are not allowed to deliberately reduce your savings amount simply to qualify for benefits or secure a higher rate. This practice is known as deprivation of assets and includes giving money away, transferring property ownership, or purchasing exempt items like cars.
This won’t include spending your savings on essentials such as food or settling debts. Should you be suspected of deliberately depleting your assets to claim benefits, the DWP will probably examine precisely when and how you disposed of your savings or assets.
According to Money Helper: “The DWP will look at the evidence to decide if they consider it to be deliberate. If, at the time, you wouldn’t have been able to predict needing benefits, it might not count as deprivation of assets. You might be asked to provide paperwork and receipts to back up the date, and the reasons for getting rid of savings or assets.”
However, if it is determined that you intentionally spent money solely to qualify for additional benefits, your application will be assessed as if you still had all of the money. This is referred to as notional capital and will impact your eligibility.