Lower Savings Limit for Working Tax Credits

WishingForWealth

Hi,

It is my understanding that having savings above £16,000 mean that people cannot claim Working Tax Credits (nor all most all other benefits) but I am confused about what the lower limit is as some places on the internet suggest it is £3,000 while others say £6,000.

What is the maximum amount of savings a couple can have before they start being penalised (i.e. below what amount of capital are savings disregarded)?

I am fully aware that savings above the minimum are treated as income of £1 per £250... what I am after is the minimum threshold level at which this rule kicks in.

Icequeen99

There is no savings limit for WTC or child tax credit.

Capital itself is ignored, only the interest above £300 is taken into account.

IQ

WishingForWealth

Icequeen99 wrote: »

Capital itself is ignored, only the interest above £300 is taken into account.

Thanks for the clarification Icequeen99. If I understand what you are saying correctly this means that, so long as no interest is earned, a person can have over 16,000 in savings and can still claim the full amount of WTC. Is this correct?

Icequeen99

WishingForWealth wrote: »

Thanks for the clarification Icequeen99. If I understand what you are saying correctly this means that, so long as no interest is earned, a person can have over 16,000 in savings and can still claim the full amount of WTC. Is this correct?

Not necessarily the full amount - WTC is based on household income, so earnings over £6,420 start to reduce maximum WTC by 41p in the £1.

And you can earn interest if it is less than £300 a year, even over that it will just be added to annual income.

Of course WTC will (eventually) be replaced by Universal Credit and there are savings rules for UC. The Government have said that tax credit claimants who move across without a change in circumstances will be given some protection against the 16,000 rule, but the details are not yet known.

IQ

bloolagoon

WishingForWealth wrote: »

Thanks for the clarification Icequeen99. If I understand what you are saying correctly this means that, so long as no interest is earned, a person can have over 16,000 in savings and can still claim the full amount of WTC. Is this correct?

It's the stupidest thing in the world isn't it? They can also be asset rich too. I can't fathom why it's this way but it is and they even allow you £3000 worth of interest (showing that when established they knew the scenario of claimants having vast savings) yet even gave them a £3000 saving allowance.

But yes it's stupidly allowed until they close it which isn't any time soon.

Icequeen99

bloolagoon wrote: »

It's the stupidest thing in the world isn't it? They can also be asset rich too. I can't fathom why it's this way but it is and they even allow you £3000 worth of interest (showing that when established they knew the scenario of claimants having vast savings) yet even gave them a £3000 saving allowance.

But yes it's stupidly allowed until they close it which isn't any time soon.

£3000? Is that a typo. Do you mean the £300 interest disregard?

IQ

bloolagoon

Icequeen99 wrote: »

£3000? Is that a typo. Do you mean the £300 interest disregard?

IQ

Yes sorry I don't know why I put £3000 I meant £300. .