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?

I agree not a lot for people in your situation who cannot work. Will be even less generous now that the LCWRA has halved for new claimants. I honestly don't know how sick single people will survive unless they also qualify for PIP. It's a massive worry.

It was 6k in 2006. I think it’s odd that 20 years later it’s still 6k.

My redundancy is probably our last chance to have anything approaching significant savings as our ability to earn has been significantly reduced by DS being autistic.

Our last lot of savings (largely from a mis-sold PPI payout) was used to fix our very leaky roof and replace our ancient boiler, that pretty much wiped us out.

People should be encouraged to save. The savings limits need to be increased, of course not everyone will be able to save, whether working or not, but people should be allowed to save enough to cover a number of common crises.

And we've never claimed UC even when we could have because pre roof & boiler the amount was too low to bother with the admin due to DH's varying wages. Post that I knew I was being made redundant and that we would only be able to claim for nine months before our savings were too high and the problem of DH's pay was still there - I was genuinely anxious about us ending up owing money when we were about to have a sharp drop in income.

Me too.

Especially since I have a disabled child. Apparently I should be rolling in it.

Why if you are a pensioner can you only have £12,570 a year to live on? Works out less than minimum wage if you were working 37 hours a week if you have more you get taxed on it after working 50 years not on benefits it seems unfair. If you have £6000 plus saved you are not poor most people can barely save anything with the cost of living as it is. If you are on benefits as a pensioner you get more help but if you aren’t you loose out. Seems to me working all your life doing the right thing you are worse off all round.

It isn’t a small reduction, it’s a taper and by the time you get to 16k you wouldn’t qualify for anything. I think a £6k threshold is reasonable to be honest - making people spend every penny they have before they can claim benefits is counter productive as it leaves nothing for emergencies.

And what happens if you have &£6k and spend some?

If your savings drop below the threshold UC increases. Providing it’s not viewed as deprivation of assets in order to claim benefit.

We wonder why the housing situation is so precarious too, save for deposits, or get an inheritance, then have to live on deposits if job situation goes to shit.
It should be possible to ring fence but be unable to use for any other purpose. Encouraging people to improve their situation should be the norm.

You mean it reduces between for savings between £6k and £16k. Less than £6k and you get the full entitlement.

Sadly not. I can't believe some people think it's too much!

Ok so if you don’t rent, you own. If you have no property related expenditure and benefits pay for everything else, you’re not in a bad position at all, particularly if you’re a single person.

You don't get a fortune in benefits! They are set at a deliberately low level.

I think there should be a way to save for a house deposit that's locked away from your benefits that you literally cannot use for anything other than a house deposit (maybe a car) some kind of government backed savings initiative so you can go over the 16k limit it would encourage people to save and move house in the long term it would cut the benefits bill because they pay for rent they dont pay for mortgages

You can save up to £16k before benefits are stopped. Between £6k and £16k there is money taken from your benefits due to the interest you’d make on your savings - as interest is counted as unearned income

so you can save for all those items mentioned

But people do spend all there savings before. Paining benefits, not realising there is a buffer

So how would I get to work if I couldn't buy a car. So disabled people or carers can never have a holiday

It isn't. At 6k the amount you receive in benefits lowers until 16k when it stops completely. Google is free, maybe use it

Could you live on £800 a month people on benefits still have to pay gas, electric, water, council tax, food, insurance, petrol.

To be eligible for the account, you must be claiming UC and must have at least £1 of earned income during the month you open the account; once opened you can pay in whether or not you’ve had earnings for a particular month.

You can save a maximum of £50 a month; get a payout at end of year 2 equivalent to 50% of the highest amount you’ve saved. The bonus goes into your bank account not the savings pot - so, if you save the maximum monthly amount and don’t withdraw any, after 2 years you’d get a £600 bonus; and would have £1200 in the account. If you continue to save at £50/month, at the end of year 4, you’ll receive another £600 bonus and have £2,400 saved. Then the account closes and you receive the remaining cash - all amounts are tax free.

You can only open the account once, each adult in a couple can open an account.

You can withdraw money at any point during the 4 years the account is open; the bonus paid at the end of year 2 is based on the highest amount saved during that period (so, if you saved £850 then took out £450 before saving another £350 - the maximum you can save over 2 years - your bonus would be £425 - 50% of the highest balance; if you paid in £30 a month and took nothing out, you’d get £360 bonus at year 2)

From year 2 to year 4, if you continue to save, the bonus is 50% of the difference in savings between the end of years 2-4 - so, if you continue to save at £50/month, it would be another £600. If you put nothing more into the account after year 2, there would be no bonus due at the end of year 4.

Its not savings its the full amount of your bank accounts. So when your wages go in from your job that also counts towards your 6k even though they will be pretty much coming straight back out for bills.

Thankyou I already read it. It seems more hassle then its worth to be honest unless you can consistently pay into it and not keep taking the money out.

This isn’t correct; as a junior ISA is not accessible until the child is 18 and the money in it belongs to the named child, even if there is an adult’s name on the account; therefore, it can be disregarded so long as you can prove the “beneficial owner” of the money is the child.

That's funny that may seem the case if you live somewhere like London. If I had a pound for every conversation I had with a dr that ended in them saying we don't have that here i could go private. Also the nhs isn't free we're paying for it every month.