Best way round UC liquidity punishment

They advise to keep cash by when investing, however when I eventually get switched over to universal credit they penalise you for having more than £6000 between the two of you, which for us is the case after payday on account of wife's idle cash pile (which she won't put into anything) and my isa

For every £250 you have in capital they ridiculously assume an income of £1 a week, and then I believe apply a 65% taper, so that works out at 13.52% you have to beat to outperform it, which is possible but involves taking risk and, in a risk vs return way it'd make more sense to pay down the mortgage

A pension would be a better performer and benefits solution but then I'd be keeping an unsafe level of liquidity

I suppose it just comes down to figuring out what level of cash I really need, or maybe just take out PPI and then I wouldn't need to keep much cash?

Monthly expenses about £700 a month for me and £300 for wife, I suppose the mortgage route could reduce my monthly payments possibly


  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    They don't actually assume you have an income of £1 a week for every £250, they assume you'll spend £1 a week of your capital.

    It doesn't matter whether that £6000+ is cash or investments, otherwise millionaires would be arranging their finances to have less than £6000 cash, then claiming UC.

    This question would be better asked on the benefits board, as here you will get people asking why they, the taxpayer, should support you when you have enough to invest.

    Read the details of exactly what does and doesn't count as capital. it's a long time since I had to claim benefits, but when I did there were some useful exceptions, which may have gone now.
    Eco Miser
    Saving money for well over half a century
  • System
    System Posts: 178,104 Community Admin
    Photogenic Name Dropper First Post
    I suppose its just trying to work out the best destination for the next £

    And I'm trying to work out I suppose if PPI is a replacement for needing to keep cash, if it is then I can just go mad on the pension
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