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?

You don't have to leave it in for the entire period.

They pay the interest at the end of 2 years and 4 years, it's 50% of the highest amount you've had in it as long as you don't close the account. If you save £500 then withdraw it then at the end of the two years you will still get £250.

If you are working hard and can’t afford to save up to 6k or at least several thousand grand, it’s your fault. You don’t want to make sacrifices.

also guess what, essential emergencies like dental costs, moving, and upfront deposit, funerals which cost several thousand all are “basic costs of living!!!”

there should be money for emergencies. Its purpose should allow for emergencies on top of basic living support

if people can’t pay for emergencies they end in debt and struggling and government ends up paying for them in the end anyway.

Also don’t forget, money in current account such as rent and bill money is counted as savings. So it’s not actually 6k but less than that.

People on UC still have jobs
Some benefits such as PIP are allowed by certain lenders.

A lot of people are topping up their rental allowance by nearly as much as a mortgage payment to live in a dive.

Allowing UC claimants to save for a mortgage deposit would be hugely beneficial to the system as the government are paying billions to landlords.

But surely the point of savings is that you use those to pay your bills and expenses while you look for a job?
Then when you hit the level you can start claiming, you put in your claim?

What are savings for if not for a "rainy day" such as losing your job?
I think it's odd that your friend chose to spend hers on holidays etc to "get herself" under the limit to claim!

These posts are so unbelievable on the basis that the amount you’d receive in support is so little you’d be better off holding onto the capital and putting into a high interest account or restriction shares I said to generate the same money you would receive from universal credit without losing the capital
Or perhaps her friend was just so illiterate, she didn’t know that

I'm not an expert in JSA but I know that, with CB ESA, it's non-means tested, except for pensions income. Any pensions income over £85pw will result in a £1 reduction in ESA for every £2 pension. I forget the point at which this means you don't receive any ESA. I suspect that the same rules apply for CB JSA.

You do know that not every benefit claimant gets high rate mobility allowance ( which gives access to the motability scheme) don't you?

they monitor your accounts anyway though? I’m saying this because my friends relative was contacted about deprivation of funds and had to explain

Oh right. I'm not sure about manipulating behaviour through social control, not when it means people's means of subsistence are at stake. I also don't think social policy should be built on unevidenced assumptions.

I think that's really feckless.
I was in the same situation last year. The thought of deliberately using my savings/redundancy money for fun stuff rather than paying my bills sits really badly with me.
What a model to show your kids, and where is her pride?

Well said! I became physically disabled quite unexpectedly at the age of 46, having just started a new job with a view to taking on more hours the following year when DS started at high school. I was a single parent and couldn't have afforded childcare (very little funded childcare in those days). I wasn't able to work after that. I now claim my full state pension plus DLA (I was never invited to claim PIP as I was approaching retirement). I am slightly better off than I was, but not much.

These people sitting in their ivory towers complaining that UC claimants shouldn't have any savings have no idea what it's like. Any one of us can experience a life-changing event at any time. I worked as a volunteer benefits advisor for a local charity, and some of the people I came across were going through horrendous times! If you have a good job, are in reasonably good health, and have a roof over your head, then please count your blessings. Many people would be so grateful to be in that position.

If you are working and have no savings that is your fault (certain exceptions aside)

You should be asking yourself why

It has been £6k for a long period of time. Essentially you could reasonably have £6k a following redundancy - and need the funds to move house/ similar when getting a new job.

Not 100% sure on UC, but with the old style JSA the first 6 months were not means tested - but based on having enough national insurance credits. This meant you could claim benefits and national insurance stamps after losing a job, hopefully with the view that you would find a new appropriate job quickly.

£6k used to cover reasonable moving costs (deposit/ first month's rent/ moving vans). I suspect it does not go that far anymore.

This is a little unfair. There are different periods in people's lives where they are likely to have no savings - versus other items when they may have a large amount. As an example - Pre-kids we had a decent savings buffer - to cover maternity leave and the early childcare costs. Obviously that was then spent.

Why is it so bad for encourage and motivate the country to save? At least for an emergency fund?

Very well put.

If you could point out where I've said that it is "bad (to) encourage and motivate the country to save" I may be able to give you an answer.

When I had 2 children under 4 my childcare costs were exactly the same as my income. I literally worked for free in order to keep my career going and benefit from the resultant increased salary years down the line.

if it wasn’t for my husband’s salary we’d have had zero money to live on. There was no savings at that point in time at all.

We had to get a boiler through finance. Also on UC.

I'm all but certain that you can do exactly that. You can have a NI Credits only claim for LCWRA, even if you don't qualify for any cash from UC. I'm not sure if there's any small print which might exclude your child but it's something you need to double check.

If that is the case then it's a dereliction of duty that this wasn't explained to us. We were just told the claim had to be stopped.

But I don’t think people on uc should be taking thousands of pounds holiday surely? Why is the tax payer subsidizing that?
I agree with a car though - when I sell one car to buy another (eg when I needed to change to a five door bay seat friendly car) I had a few thousand in my account for a few days - if I’d been on uc it would have been very upsetting if that got stopped due to buying a new car! I guess that’s the kind of reason for the limit - people need to have a few thousand available for house moves, emergencies etc and if you don’t allow this it’s just encouraging credit card debt

I think you should be asking yourself why some working people have no savings - broaden your mind a bit.

Cos they're tight fucks. It should be higher.

I had six months of living off savings when I had low and no pay for maternity leave and only got pittance in child maintenance. I didn’t clock at the time I could have used savings to over pay mortgage but I wouldn’t have felt comfortable doing that. In hindsight I was a bit of a mug as everyone else probably would have overpaid and then claimed!