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?

Do you know anyone on benefits?

This isn't correct. Per the info on gov.uk, a junior ISA doesn't affect a UC claim.

They don't even pay it, it's a loan

The welfare safety net is just that.... a safety net.
If you are privileged enough to save etc, then you do not need the safety net.
The trouble is, you are looking at welfare as a reward.

This is nonsense. People who get hit by cars aged 22 would much rather be working.

Life just doesn't follow rules, that's why social safety nets are vital.

Yes me!

I said in my post I already had one to re-do my bathroom when I first became unable to stand to shower. Things are now worse and I need to swap from a manual chair to a power one.

Saving whilst working isn't a privilege - it's a discipline.

well I think there are quite a few people who work full time whose net take home pay is less than someone who earns less and is topped up. that is why many people choose to work the exact amount of hours where this crossover happens so they aren’t worse off coming off UC. It’s a moral hazard.

Also there are people who work full time for instance who have to pay for expensive rail travel/ fuel/ etc just to get to work. If someone is out of work they won’t have any of those costs. A yearly 1-2 zone London travel card costs approximately £1800, zone 1-3 2100 and if you can’t afford to live so close to the centre, a 1-6 yearly travel card is £3300! That’s £275 a month.

UC will give you a LOAN to pay the interest on your mortgage.

Well, it doesn’t even cover the interest component of the mortgage so as I say you would lose your house pretty quick

If your bills use all your wages, you can't save. Obviously.

Yes, and you would have to get a loan, via the DWP, to cover the mortgage interest payments, thereby putting a charge on your house until you can clear the loan.

People work on uc so still have the same travel costs as everyone else

A couple of misconceptions on this thread.

Help to save isn't for "people on benefits". It's a savings scheme for anyone who both claims UC and has earned money in the assessment period prior to opening the account. You can pay in up to £50 a month and will earn a bonus based on how much you pay in. You can access your savings at any time but withdrawing money will affect your bonus (which is paid out halfway through the term and again at the end). The max you'll get is 6k.

Your children can have savings if you claim UC but they need to be in an account in their name which you, as parent/guardian can't access. You can open one at any bank or building society. UC or CAB can provide information.

Some people will have savings over 6k disregarded for example if you've had a benefits back payment. It's usually for a year but I've heard of cases where back payments are disregarded fir the lifetime of the UC claim.

Also to point out, for those arguing against savings while on UC, that circumstances can change unexpectedly. Look at COVID - people working and saving for, say, house deposits who lost their jobs as a result of the pandemic were suddenly in the position of having to spend those savings, meaning that they had to continue to rent privately. Even the most zealous couldn't really argue that people should have foreseen COVID or that people who hadn't expected to have to claim UC weren't dealt a massive blow. Benefits are not gifts, they are not handouts. They constitute our social security safety net. The more conditions we place on them, the more the danger that they won't exist in any meaningful form when any of us truly needs them.

If you don't earn enough to live decently w/o having to cut back on any sort of joy, saving is indeed a privilege.

I think it may be based on the recommended emergency fund which the government might expect householders to need. I don't think it should be raised people on salaries up to £50k qualifying for UC means they earn that much and have no emergency fund- is simply nuts, if no one with more than £6k savings qualifies then only qualifying up to £30k is plenty, people need to take responsibility for themselves not expect the state to do it for them.

I'm on UC and my mortgage is just under £1200 a month. A large proportion of UC claimants don't rent and therefore don't receive any housing element.

Sorry, I thought you were saying at UC paid a mortgage.

What makes you think all UC claimants are 'pissing it away'? How insulting.

Just to say it isn't a requirement that children's savings accounts have to be completely inaccessible by the parent/guardian. It just has to be in the child's name.

Yes 35% are in work. That means 65% don’t. Only 10% work full time so would have the same travel expenses.

it was just an example of why someone on UC might be able to save and someone working full time couldn’t. Doesn’t apply in all situations.

You don’t get any brownie points for being a good productive citizen - I sussed that out years ago when I was on benefits as a single mom

you feel ( and rightly so ) that you are doing everything right everything you were told to do as a young person
Go to Uni
get a good job
buy a house
get married a have 2 kids
And you feel that you should benefit from doing the “ right thing “ cos that’s what you were told to do

then you see a maybe a single mum
2 Kids
in a social housing house that’s way better than yours. A new build. It’s got solar panels
lovely big garden if it wa sold it would be around 300-350K

she’s even got savings of 5k

but the rent is around 400 a month compare to 1500 a month on the private rentals and say 1100 as a mortgage
she’s working but around 30hours a week
getting UC as a top up
help with child care cost
and child support from the kids dad

she can afford a holiday abroad with the kids
she isn’t overly stressed about money

And your left thinking how is this possible & fair

I should have done better at school 😂

if she has another kid she gets extra money and won’t have to work till the child is 3 so effectively 3 years at home and still being supported.

but you desperately want another child but you can’t afford it cos you can’t afford the hit in your wages and extra child care cost

but that single mom isn’t your enemy

Yes, I am one.
I am fed up being told that I get rent etc paid. I do not rent.
As a single disabled person, I am on the max UC I could be.. which is a little more than £800pm... I am on less than a pensioner.

Another day, another shite and false information filled mumsnet benefit bashing thread 😂