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?

Correct. Large withdrawals for holidays and expensive non essentials would be viewed as deprivation of assets in order to claim benefits.

It’s not a question of empathy but a question of equality and fairness. Someone receiving UC should not be better off than a large percentage of people not on UC with no savings.

I couldn't afford the repayments for finance like I said if I'm saving to buy a car I can dip into that for unforseen expenses. If Im paying a car on finance the payment needs paying every month no matter what. I never said being in debt is immoral. I personally wouldn't get into debt because I don't have enough coming in to pay it off. I'd just rather save for things

Why tag me? I said nothing about cars.

I just confirmed they carefully check all accounts and look for deprivation of assets like buying gold.

The fact that it doesn't disregard even a LISA is a massive disincentive to save, for sure. Not just for current UC claimants but for everyone. Because anyone can hit a rock in the road through redundancy or illness or divorce. At that point, there is effectively no state safety net for someone with savings. And if their savings are in a LISA, they will lose the 25% because they'll have to withdraw early. It's another of those perverse disincentives that you see all over the benefits system - for quite a wide range, you are worse off having something of your own than having nothing.

Lol you can buy gold with cash and you don't declare individual transactions under £10k. There is an entire global economy built on gold, much of it under the radar. Good luck with that.

Unless you're a landlord of course.

Car

It's too low and never been increased in line with inflation since UC was implemented 13yrs ago. The current figures should be something like £9k - £20k limit.

I looked into it a while ago and it seems to be based on a figure back in the 80's. I went on a bit of a detective hunt via some reddit threads and old .gov documents.

This is called deprivation of capital, and you will be given less UC as a result.

https://www.gov.uk/guidance/universal-credit-money-savings-and-investments

Sorry, but yes it does. That’s the whole point. Living with a disability can be expensive and PIP is designed to mitigate some of that extra cost with a cash award depending on the level of need.

The PIP assessment directly examines the impact of disability on a range of tasks essential to daily life and mobility, as a way of determining whether the disability or health condition is likely to incur extra costs. The impact determines the level of benefit awarded in order to cover those extra costs. Put simply, those whose conditions are assessed as having the highest impact are awarded the enhanced levels of PIP because they are judged to have the highest levels of disability related costs.

If you have never applied for PIP you can’t possibly know whether or not you would get it. And if, despite needing intensive medication, you are still spending £££s coping with your disability then you are not living a normal ‘disability cost free’ life are you ?

But in reality they dont
UC is the minimum requirement to keep people alive. They cant drop below that

Landlords aren’t part of the state.

If you can save £4k (the remaining £2k being to cover next month’s rent and bills) to pay for a new car you can make a down payment and put the rest on finance. Now, instead of saving, you’ll be paying off the finance. I sold my perfectly fine car for £4k last year so it’s entirely possible.

If you got £4k for your car a buyer would have to find at least £6k to pay for it through a dealer, especially when accessing finance. They may not even be eligible for finance if on benefits or a low income. And taking on debt with no/low savings and a low income is a truly terrible idea which no financial advisor would recommend. Replicated across the country it's a terrible thing for the economy in general.

Plus at that price the car is at/near the point where it's going to cost a bit every year to get it through an MOT. So now you've got debt to service plus ongoing costs.

This isn't a solution, it's just a garbage situation.

What about working people on benefits paid by the working people of the country? What about working people whose job happens to be unpaid carer? What about working people who have lost their job and finding it hard to get another one? What about disabled people who aren't able to work? What about the children of people who aren't in paid employment?

But yes. I see what you are saying. We should definitely operate a two tier system of the morally virtuous and the feckless, undeserving rest. Perhaps we could have some sort of symbol to mark out the second class citizens? One they could wear on their clothing maybe?

Let them drive buses indeed.

And a large cash withdrawal counts as deprivation of capital too. So you don't get benefits.

When DS claimed UC, he had to justify every tiny withdrawals and deposit - including getting paid back £11.50 from his friend for a pizza they'd shared.

Because....?

TBF I think they take that 25% into account when calculating savings. But I do agree with you. I think it's grossly unfair for someone to have what might be their only chance to buy a house taken away because of a random event like job loss.
Also, plenty of us who had children in the 2000s spent 18 years saving for them through child trust funds. If, like me, your children are disabled and may struggle to work, where does that leave your lifetime of doing what you were told was the right thing and building up savings for your kids? Are disabled people supposed not to have normal aspirations in life?

Also lol at the idea of a person buying gold withdrawing £1500 at a time from the same bank account their UC gets paid into.

Yes, they do. If you knowingly reduce your money, savings and investments, or transfer them elsewhere to get or increase your Universal Credit, it’s deprivation of capital. DWP will not reduce benefits if they judge you to have paid off debts or paid for goods/services that were reasonable in your circumstances. But if they judge you to you to have deliberately reduced your money, savings or investments, then they will treat it as deliberate deprivation of assets in order to claim benefits and for UC purposes you will be treated as still having it. It’s called notional capital. It’s perfectly legal to treat claimants this way and claimants who do this can be subject to prosecution and penalties.

Housing related benefits are.

Yep. Excatly what I said

Let's also remember that the savings limit is the same for single and joint claimants. It assumes pooling of money. But people (usually women) in financially abusive relationships can't rely on this sharing of resources leaving them with little or nothing to manage crises or escape a situation.

Yes, he did. UC periodically ask for bank statements and if there’s anything on there that you haven’t declared they will query it. Money that’s owed to you and gifts from friends and family are generally disregarded unless they meet certain thresholds, but they still need to know about them. Not declaring these things can potentially result in suspension of benefit while they investigate if there are regular discrepancies on bank statements.