Universal Credit Savings Limit

[DavidB6721]

Nobody with more than £16,000 in capital is allowed to claim any means tested benefits in the UK. Do you think this limit seems a bit low? The reason for that is because it has not been increased for 33 years!

If you think that is not fair, you might be interested in one of the petitions on the UK parliament website at the moment, which is calling for a substantial increase in the benefits capital limit (petition number 590695).

If the moderators will allow me to include a link, you can find it at:

petition.parliament.uk/petitions/590695

If you agree, you might wish to consider consider signing this petition and sharing it on social media, etc.

That was to @MLMbotsno

I think it's disgusting tbh. Why shouldn't someone who lives a frugal life be given the same amount of support than someone who blows all their benefits on rubbish? It encourages nobody to save. If they were allowed to save a small amount each month, with no cap, they might be able to save enough to buy a property, and leave social housing free for others. Many working people on UC would qualify for a small mortgage if they were allowed to save a deposit.

Most people claiming UC don't have savings, we don't as we used our savings in lockdown. We are now claiming UC and can't afford to save.....just in case anyone here thinks people claiming UC are living it up.

I have a mortgage. Which means I am already saving the mythical taxpayer money, as there is no help towards mortgage payments, whereas there is help available for rent.

Not complaining, I like my home and one day it’ll actually be mine.

But. As a homeowner there are expenses. I have a flat roof which will need replacing soon, and other major works will be needed in order to keep this place in a liveable condition. Again, not complaining. Just an observation - one of the downsides of home ownership rather than rental. Current estimates for the work are between £10k and £20k.

I have a bit of time, I have some help, and a small inheritance.

Under tax credit rules I can save up until I have the money, then do the work.

Under UC rules I can save a small proportion of the cost, but I will then have to take out a loan for the rest of it. A loan which will not be on the best terms, as I don’t have the best credit score, being on benefits snd a low income. So it will cost me more. It will take me longer to pay off than it would have done to save. And if there is a gap between having the funds and work starting, then any of the capital which does not come from the loan will be taken into consideration and my UC will be reduced. Remortgaging not possible.

I’m not workshy. I provide round the clock care to very profoundly disabled family members, saving those taxpayers thousands compared to what it would cost to provide a bed in hospital or a residential home. And I do it gladly. But if I were switched from TC to UC, then we would all be homeless in short order. And accommodating our needs in rented accommodation would be extremely difficult and again far more costly, than the cost involved in allowing me to make the savings necessary in order to keep this place standing.

I read of someone running a business & the "savings" they had were for stock
Also lets remember by the time you get to £16000 you are actually getting very little in UC because of taper & you saved this before you needed UC - a single person gets very little & HB part has not increased for years so rents have out stripped the cost. If you own your own house you won't get HB you get a loan which has to be repaid (think shares in your house)
imagine if you are near to retirement & these are life savings.

Of you have a lifetime disability & your parents die your inheritance is gradually stripped from you until you have very little.
If you are rich however you pay very little tax & look down on the "undeserving poor"

@MrsKeats

You must be joking. There are loads and loads of jobs going where I am. Get a bloody job.

Wow, you clearly know nothing about this or are just ignorant. People can work 40 hours a week and still qualify for benefits, for your information.

Sorry yes it is correct that the Help to Buy ISA was scrapped. I think money in the government Help to Save accounts is not counted unless you have other savings.

I appear to be in the minority but I kind of agree. About 10 year's ago our income was topped up by tax credits (that didn't have the cap), and whilst claiming we were able to save a small deposit and get a mortgage, which cost much less then rent and ment we claimed less in the long run.

Just before we bought, we would have had about 10k, not over the cap, but payments would have been significantly reduced. If we'd been on uc we'd have had to dip into the savings to make up the differenceeach month, until it was gone.

The same would happen to with anyone who wants to save to train for a better career or save to cover child care so they can have a child without having to give up working.

For many it works as a poverty trap, making it that bit harder for people to improve their lives.

virtually any saving is counted as capital including private pensions plans

I'm lucky not to need to know much about the ins and outs of UC.
But I do know of another aspect to this thread.
My friend's son, aged 31, was living independently in rented accommodation, and working long hours in a well paid job. He had saved around £20,000 towards a deposit for a home of his own. As a single guy, he was doing this on his own and had quite a way to go yet.
Then he began suffering from a debilitating condition, couldn't work, and almost had a breakdown.
He came home to his parents, (my friends), and received sick pay from his employers for a while. He really hoped to be able to go back, just needed some recuperation and TLC.
After several months, his condition didn't improve. There is as yet no cure, just ways of trying to manage it.
He was eventually dismissed on health grounds, (all legally and properly done), his work sickness benefit stopped and he had to give up his tenancy.
The family were certain that he would get ESA, (non-means tested), and he has enough NI contributions, but it's been a long drawn-out process. He's awaiting a decision, (has been told it may take up to 6 weeks!), but his gut feeling is that he'll be turned down.
If so, he could of course appeal. But could fail.
The thing is, no way is he fit for work. I truly believe this.
If he's not able to get ESA, I can't see how he could claim JSA as he's not fit to look for work.
UC has been mentioned to him - but even if he was eligible, he won't qualify yet due to his savings.
So yes, I fully see why people say those with savings above £16,000 shouldn't get UC.
But then when I hear of folk like my friend's son, I can see another side.
Hopefully one day he will be able to work again and continue to save up and earn enough for a deposit and mortgage.
But until that happens, if it does, he's likely to lose all he's saved for a home of his own until he's down to his last £6,000 I think, then he could claim UC.
I think this is really harsh, when he's worked so hard to save.
So I don't know what the answer is 🤷‍♀️

You can still claim UC if you have up to £16k in savings, they will deduct a certain amount from your UC claim to take account of it though. I think it's £4 for every £100 you have over £6000

You can have up to £6000 in savings with no penalty.

@mumwon

virtually any saving is counted as capital including private pensions plans

Not true. If it's inaccessible, it's not counted. My daughter has a junior ISA that she can't touch for another few months. It's over the £6k limit. She gets the full amount of UC because it's disregarded. Pensions are not counted either.

I agree, it’s a way of trapping people in poverty and it teaches people to spend instead of to be frugal and sensible and save.

I agree it's a poverty trap. To retrain or buy a stable home costs money and by capping at £16k many people will be trapped in a vicious cycle never able to get off benefits or better their lives.

@LindyLou2020 exactly the sort of circumstances.

Btw he can claim when he has just under 16k

By allowing low minimum wages, top up UC is often just subsidising employers who should be paying more anyway.

I find it distasteful that people don't kick up a fuss when multi-millionaire pensioners can claim winter fuel bonus, a dual income family on £40k each can claim tax free childcare plus 30 free hours a week from 3, a middle income family can stay in the council house even as their salary goes up, but woe betide a bus driver who wants to save money for a deposit, or a single mother who has saved for years for her family but then spends a year unable to work -they have to run down their savings.

@MrsKeats

You must be joking. There are loads and loads of jobs going where I am. Get a bloody job.

Unfortunately many that get UC are also working,but because of the high cost of rent,low level of wages and childcare costs,they qualify for UC. It should not be that wages have to be topped up by tax payers,indeed I guess many who are in this category would prefer the employer to be topping up rather than the tax payer. I don’t think many are aware of the amount of money that is paid via UC towards rented housing. You can get anything between about £350 and £1500 paid every month towards your private rent,this amount will be adjusted down for earning. Then you can also get up to childcare costs of 85% refunded. This all adds up to a massive amount of money paid out every month in this country,which should not be necessary,if housing costs were not so out of whack with wages. If you look at those who are renting and because of the above situations are getting a large amount of UC towards rented housing,how could they ever afford to get out of rented and buy their own place,if they are penalised for saving for a deposit. Once they buy their own place,this is not subsidised by the government through U.C.They are standing more on their own two feet,one less home subsidised heavily by the tax payer.

But for what it’s worth unless for the above reason,trying to get out of rented and buying your own house,then no the limit should not be upped from £16 000.

Benefits need to start taking into account what you've paid in. They do in other countries.

I agree that it should be raised. 20k seems fairer. It penalises anyone trying to save for a house and ensures you stay poor and in rentals. I find it unfair that you can potentially own an expensive property and claim benefits but those who have managed to accrue any cash with the intention of buying their own home can’t. We had this discussion with the job centre when they 1st rolled out UC (1st area to pilot it) and dh suffered a shock redundancy. The employees of the job centre were shocked (after having to double check because they all assumed that you could be exempt if you were intending to buy a house) because they said that there is an exemption for cash over the threshold if you’re in the process of selling and buying a property, just not if you haven’t bought yet. I’m really not sure how that’s fair.

@Viviennemary

Benefits need to start taking into account what you've paid in. They do in other countries.

That will never happen,you know that

[quote CornishTiger]@LindyLou2020 exactly the sort of circumstances.

Btw he can claim when he has just under 16k[/quote]
Ah....thank you x

Students may as well pay off student debt.
And others put max into pensions. Which is less if not working but still i think 2880 a year.
And yes lifetime isas should be excluded as you cant really get the money out and its meant to.be like a pension.

My husband earns £28000. We have one child and I currently don't work because of the high childcare costs. So we are down a full salary now. After tax my husbands wage covers all bills but we have nothing left over for food and other things. According to the benefits calculator we would be entitled to £700 a month if we had £6000 savings or less. But we have worked and saved our whole lives and have savings of £27000 which means we are not entitled to anything. We will have to dig into our savings to pay for Food and expenses. This will dwindle our savings away quite rapidly. It does feel like we are being punished for being good with our money while someone else in the same situation and spends their money frivolously is entitled to the benefits.

MrsKeats

You must be joking.
There are loads and loads of jobs going where I am. Get a bloody job.“

Foolish comment.

Do you not understand that millions of people in need of UC are in full-time work?