To wonder why the UC savings threshold is £6,000?

[GiddyLurker]

Why is the Universal Credit savings threshold set at £6,000? What’s the reasoning behind that number?

It feels quite specific and I just wondered whether there’s a particular logic or policy decision behind it?

No idea, I suppose they have to have a number! But £6000 is low IMO. Should be raised to £12,000 IMO.

If you can afford to save that much you shouldn't need a fortune in benefits.

Presumably because universal credit is designed to support those who are in need... But if you have enough to live, plus more to save, then you are being gifted too much via UC and therefore no longer in need.

Can you explain why you think it’s low?

Many people working full time don’t have this amount of savings, I don’t think tax payers money should go to people who have £12k in the bank.

The thing is £12k goes incredibly quickly (just a few months) if you suddenly loose your job.. and for instance have never claimed benefits before.

Why? Why should you not have to spend your own money before getting a government handout?

Right, and so it should before you get benefits. The benefit system can’t cope as it is, why should someone be sitting on 12k and claim UC?

Just ask Chat GPT, they have come up with a very clear response

Lots of working people don’t have £6k in savings though, and personally I find it mad that those getting benefits can have this amount in savings when those working that dont get any form of support via benefits can’t save

It isn't 6k it's 16k. There is a small reduction on anything over 6k but under 16k.

It’s £6k for full allowance but then it tapers down until those with £16k get nothing.
Google is saying the UK median savings is £9k and up to 40 percent of people have less than £1k.

Most people’s monthly essential expenses are not £4k.

It is the point at which your benefits taper off. Off the top of my head, is about £4 for every £250 over the £6k that gets deducted.
The point at which you can not claim at all is £16k.

If you work and claim UC, there is a government savings scheme called 'Help to Save'.
Saving money is encouraged. Everyone needs something for a rainy day.

No it’s not. It’s £6k

Because it was a year's salary for an office junior (or AA in the civil service) in about 1994. It's just never been increased in the subsequent three decades.

I suppose on this logic maybe they should take the average time it takes to receive money when you claim it, and multiply by eg the average weekly household costs, and use that amount? So that people have that buffer for when they need it

It does sound crazy that someone with five figures in the bank gets money from the tax payer to live on - but I’ve fortunately not been in that position so don’t know all the niceties

I can’t work due to cancer. I don’t qualify for UC. I currently have £200 in my savings and that’s only because I moved it over from my current account so direct debits wouldn’t eat it before the end of the month. Currently eyeing up the dc’s savings accounts for emergency use. What I’d do for £6000 in savings. Some people must live quite well. 😳

Average cost of a funeral?

It is 16k . Get your facts correct. Your monthly amount starts to reduce slightly for anything over 6k but you can still get UC with savings up to 16k.

No, the cut off is £16k. Between £6k and £16k, you lose some benefits.

My husband and I have worked hard and diligently all our lives and maybe to our shame have never had 12k in our bank account.

I think 6k is to low how are you suppose to save for a new car (not actually new) or a holiday or a new boiler etc a lot of people on uc work aswell

Socially there's a huge cost to making families precarious. The state picks up the tab if people can't, for example, buy a car to get to work. Or can't afford to relocate for a job. Or can't afford a deposit on a rental.

Wanting to be excessively tight with benefits is a peculiar form of self-sabotage - it harms the taxpayer to be too restrictive, but still people want it. Just don't understand how the world really works presumably, live in a childish imaginary world where nothing costs money.

Don't forget those who claim UC are also taxpayers - most of them work, and all of them pay VAT.

People might have had that much in savings when they started to claim benefits.

The limit is 16k !

About £4k.