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?

A second property that you rent out is considered capital for Universal Credit because it’s not your main home. Its current market value, minus 10% for sale costs and any outstanding mortgage, is added to your savings and assets. Rental income received is also treated as income and deducted £1 for £1 from UC. The only exception to this is where the relative living in it is over the age of 60 or has a disability, or both. And it has to be a direct relative - parent, sibling, child etc. Which is not what you said.

Not quite sure where you got that from 🤣

I was talking, as ever about housing related benefits.

All you need to know about me is that i have worked and contributed to this country for 50 years and me going to work at 9.00 in the morning and seeing her sat in the sun and then finishing my last job at 8.30 at night and she was still sat there especially when she'd already confirmed she wasn't ill is slightly galling. If that makes me judgemental so be it.
One of my children doesn't work and lives on benefits so I only judge the ones that I know for a fact are taking the piss.

The whole country is begrudging me a £500 yearly increase and being blamed for all society's ills. So yes I am bitter.

I really don't need to know anything about you.

And I was talking about housing related benefits that directly benefited the claimant not the landlord.

Have never suggested owned outright homes be sold, however it is beyond ridiculous that those with assets which are capital get to have their cake and eat it too?

Why should taxpayers, many with much much less, have to pay when someone is sitting on hundreds of thousands in equity without anything ever coming back? Owned outright homeowners often have less bills too, yes get help if needed but pay some or all of it back eventually when house sold and that liquidity is released.

Beyond ridiculous renters can have just £6k before taper kicks in but owned outright homes owners keep hundreds of thousands in unrealised assets yet are deemed due to being eligible for means tested benefits as being the ‘most vulnerable’. Most renters would love to be that vulnerable!

On what basis do you think you should be allowed to keep all capital (once house is sold it is cash) greatly in excess of what renters are allowed in savings?

If you're struggling for want of £500 per year, I'd be happy to pay extra tax so you could recieve it. The same as i dont begrudge taxes to pay disability benefits or as a lay person consider myself best placed to judge who should recieve them. I believe from each according to their means to each according to their needs.
The people who's job it is to assess needs seem to typically guard the public purse ferociously, so while no doubt a few might fall through the net and claim when they shouldn't, they're nowhere near as much of a problem as those at the other end of the scale, hoarding vast wealth they exploited people to gain.

There’s a reason that UC doesn’t count the home you’re actually living in as capital - the clue here is that you’re living in it. When you sell a home you have to buy another, hence there is a period of grace where UC doesn’t count the capital from the house sale as an asset. Because you have to spend it to buy somewhere else to live. If you downsize and have capital left over from the sale, this is counted as an asset. What is it abut this that you don’t understand or don’t agree with ?

The benefit system is part of the social contract. You pay in when in work and you take out when you need to. Why should you give up your home paid for while you were working to ‘pay it back’ ? Bizarre.

The house you live in is not classed as an asset or capital. it is not cash (therefore capital) until it is sold. Even then, it is disregarded for a period if you are using it to buy another place to live in.
People who own their homes are not claiming the housing element of UC.
Homeowners on UC is not a problem that needs solving.

Welfare Rights Act 2012 Ch1 para3 and Universal Credit Regs 2013 Plart 2 para18 and Part 3 para 72 refer to the £16,000 and £6000 amounts and how tariff income is calculated.

Exactly this. I feel like I’m banging my head against a brick wall trying to explain this to some posters.

Which replaced the legislation governing thresholds in the 1990s.

Thank you. If only more people felt like you. I have been rather scathing about some benefit claimants but it's very depressing to read every day how resented we are because apparently we are all millionaires.
We are managing on our pensions because we did downsize but the difficulty will come when there is only one of us left.

Well said.

My mortgage is 136k on a 380k house and I claim a UC top up… forgive me, for I have sinned 😂

Yeah. I'm not sure why you've had some kind of beef with me since you misunderstood my original point. I think we probably agree on a few things (obviously not the grim, misogynistic and grimly misogynistic practice of calling women feckless!).

There is literally no way that what you want to happen could happen. Where do you draw the line anyway? If you have a car you can't get UC? An engagement ring? A designer handbag?

Not a landlord, never have been. What I have been is a DWP benefit caseworker, a public service benefit adviser and a disability outreach worker dealing with most aspects of disability, including benefit eligibility. I understand you perfectly thanks, no need to be condescending. What was it about my second paragraph that you thought unnecessary, given that your pov seems to be that the purpose of housing benefit is to pay the landlords’ mortgage costs. It’s utter nonsense, the landlord is not the claimant, the tenant is. A contribution to rent in the form of housing benefit is paid to benefit the tenant in allowing them to afford the rent.

I was about to say our figures are almost exactly the same then I realised your mortgage is £136k but that's my current equity not the mortgage amount sadly 😂

Yes, you did give us a brief rundown of your CV. I wouldn't talk about being condescending if I were you, especially not after your peculiar diatribe accusing me of all sorts!

You obviously disagree that landlords are significant beneficiaries of the benefits system and that's your right. I think though, that it takes some cognitive dissonance to ignore 50 years of housing history at the same time as being so in favour of the welfare state that you dedicate your working life to it!

ETA please feel free to point out where I said that "the purpose of housing benefit is to pay the landlords’ mortgage costs". Now that is condescending!

So strange that so many seem to have difficulty in understanding this

Slip of the finger there - it's the Welfare Reform Act 2012.

Which does not clarify why the figure of £6k was decided upon. It’s used to separate funds meant for immediate, day-to-day living from those intended as significant savings or capital investment. The previous thresholds set in the 1990’s were lower and following the introduction of the minimum wage in 1999, were reviewed and set at £6k - £16k in 2006. This figure then carried over from legacy benefits into Universal Credit to maintain continuity in the rules, but hasn’t kept pace with inflation. Had it done so, the thresholds would have been something like £10k-£27k by the end of 2025.