If your savings exceed £6,000, Universal Credit is reduced. Above £16,000, you cannot claim at all. These are the capital limits for 2026/27. Between £6,000 and £16,000, DWP uses a formula called “tariff income” to reduce your award — every £250 over £6,000 counts as an extra £4.35/month of income, whether or not your savings actually earn that much.
The UC Capital Rules at a Glance
| Capital level | Effect on Universal Credit |
|---|---|
| Under £6,000 | No effect — full capital ignored |
| £6,000–£16,000 | Tariff income added: £4.35/month per £250 (or part of £250) |
| Over £16,000 | Cannot claim Universal Credit |
These limits apply to liquid and investable capital — not your home, not personal possessions, not the value of a business you own and run.
How Tariff Income Is Calculated
For every £250 (or part thereof) of capital above £6,000, DWP adds £4.35/month to your assumed income. This reduces UC pound for pound.
| Savings | Capital above £6,000 | Tariff income/month | Monthly UC reduction |
|---|---|---|---|
| £6,250 | £250 | £4.35 | £4.35 |
| £8,000 | £2,000 | £34.80 (8 × £4.35) | £34.80 |
| £10,000 | £4,000 | £69.60 (16 × £4.35) | £69.60 |
| £12,500 | £6,500 | £113.10 (26 × £4.35) | £113.10 |
| £15,000 | £9,000 | £156.60 (36 × £4.35) | £156.60 |
| £16,000 | £10,000 | — | UC stops |
Note: £4.35 is the standard tariff figure used in UC (compared to £1 per £250 in older legacy benefits). This means savings reduce UC much more harshly under UC rules than under older Housing Benefit or Income Support rules.
What Counts as Capital
Included:
- Bank and building society accounts (current and savings)
- Cash ISAs and Stocks & Shares ISAs
- Premium Bonds (counted at face value)
- Stocks, shares, unit trusts
- Property you own other than your main home
- Money owed to you (e.g. unpaid loans you made to others)
- Cryptocurrency and digital assets
Excluded:
- The home you live in
- Personal possessions (car, furniture, jewellery — unless clearly an investment)
- The capital value of your pension pot (if not yet in payment)
- Compensation for personal injury (for 12 months after receipt, then reviewed)
- Backdated benefits payments (for 12 months after receipt)
- The value of a business you own and actively run
Joint Claims: Combined Capital Assessed Together
For a joint UC claim (couples living together), DWP adds both partners’ capital together. The same £6,000 and £16,000 thresholds apply to the combined total.
Example: Sarah has £4,000 and her partner Tom has £5,000 — combined £9,000. Capital above £6,000 is £3,000. Tariff income = 12 × £4.35 = £52.20/month added to household income, reducing UC by £52.20.
Deliberate Deprivation of Capital
DWP can apply “deprivation of capital” rules if they believe you deliberately spent, transferred, or gave away savings to bring yourself under the capital limits. If DWP decides this, they will treat you as still having the capital — known as “notional capital” — and assess your UC accordingly.
What is not deprivation: Reasonable spending on living costs, home improvements, replacing essential items, paying off genuine debts, or spending that would have happened anyway.
What may be investigated: Giving large sums to family members, making unusual investments, or spending patterns that look designed to trigger UC eligibility.
Reporting Changes in Capital
You must report changes in capital via your UC journal. This includes:
- Receiving an inheritance
- Receiving a compensation payment
- Selling a property
- A significant rise in savings above £6,000
Report the change in the assessment period it occurs. Failing to report a capital change promptly can result in an overpayment you will have to repay.
For the general savings rules overview, see our Universal Credit guide. For inheritance specifically, see our inheriting money on benefits guide.