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Savings and capital

Universal Credit is a means tested benefit which means it is income related and your award may be affected by the capital you hold, including savings and assets.

If you claim Universal Credit jointly because you are living with a partner, capital belonging to each of you will be combined and taken into account.

If you have deprived yourself of capital to gain entitlement to Universal Credit, you may be treated as still owning this capital. This is called notional capital

Capital Limits
The upper capital limit is £16,000. Having regarded capital above this level means you are not eligible to claim Universal Credit.
Regarded capital at £6,000 and up to and including £16,000 causes a deduction to Universal Credit.
This is due to the assumed yield of £4.35 for every £250 above £6,000.
Where the regarded capital amount is under £6,000, this is disregarded by Universal Credit and causes no deduction.

What is capital?
“Capital” is not defined but includes lump-sums, one-off payments, savings, investments, property, land and other assets.

Some examples of capital include: 

  • bank accounts

  • Post Office accounts

  • cash

  • one off lump sum payments including inheritance and redundancy payment

  • stocks and shares

  • premium bonds

  • Help to Save

  • save as you earn

  • property

This list is not exhaustive.

In addition, any income from capital, such as interest on savings, rent payments from second properties or dividends from shares is treated as capital when due to you. Income from capital is disregarded as income or earnings on Universal Credit.

Ongoing income (such as wages) becomes capital if it has not been spent by the end of the assessment period after it which it is received.


Reporting capital

On Universal Credit, it is the claimant’s responsibility to report anything relevant that may affects your entitlement or eligibility. When you make your initial claim, you will be asked about capital and much report any changes to capital as soon as possible.

NOTE: A decision on capital can be a payment blocker (all payments are paused until a decision is made but once resolved any owed payments will be calculated and paid), so the earlier in an assessment period you report capital the better. 

If your capital has a temporary disregard on it, you should still report the capital and if there has been a change in the amount, you may be asked to provide information and evidence on what it has been spent on so Universal Credit can decide if deprivation of capital has occurred.

The Department of Work and Pensions do have access to information from other sources which can help identify that you have or had capital and this can trigger further investigations.

Amount of regarded capital

If you jointly own capital then it will be assumed you own an equal share unless you can evidence otherwise.

The value of your capital, is current market or surrender value 

  • less 10% if there are costs of sale and

  • the amount of encumbrances secured on the capital.


You own shares worth £10,034.38.  Shares have 10% disregarded as there are costs of sale. Universal Credit will treat you as having £9030.94 as regarded capital.

You own a holiday home with market value if £110,000. You have a mortgage of £90,000 secured against the property. A property has 10% disregarded as there are costs of sale. £110,000 minus 10% is £99,000. Deduct £90,000 mortgage leaves regarded capital value of £9,000.

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