Universal Credit and savings.

MattMontreal

Hello,

I've been unemployed for 6mo but haven't claimed Universal Credit because my savings were above the 16k limit. I'm now getting down very close to 16k but I'm wondering if it matters what goes into or out of my account?

For example if I was to make a small payment into a pension that would bring me into eligible range but are there certain restrictions I should bear in mind?

Spoonie_Turtle

There is something called 'Deprivation of Capital', where it can be determined that you have deliberately spent savings to enable or increase benefit entitlement.

There are no hard and fast rules but it comes down to what the individual Decision Maker decides is reasonable in the circumstances.

So for instance, if your car broke and it would cost too much to repair, buying a secondhand car that's sufficient for what you need would be reasonable.  But if you decided to replace it with a higher end car (even secondhand) they could decide it was unreasonable and you spent more than necessary in order to reduce your savings and make you eligible for UC.

With pension contributions, it might be alright if you are already making them regularly, depending on how much and when you started.  If you don't, and you just did a one-off to get your savings below the threshold, that would be classed as deliberate deprivation and you would be treated as still having the money and thus not eligible yet.  Thanks to NedS for the correction below!

Paying off debt is explicitly allowed though, so if that's applicable you can do that.

Otherwise the safest thing to do is just continue living as you are at the moment and then claim when your savings naturally drop to the threshold.

NedS

Paying money into a pension cannot be considered as deprivation of capital as you still have that capital (therefore by definition you cannot have deprived yourself of it), just that now it is held within a pension (which is just a form of tax wrapper, not dissimilar to an ISA) and UC rules state that assets held within a pension are fully disregarded until you reach state pension age.

sammyjammy

You should consider claiming new style JSA as this is not impacted by your savings, its payable for up to six months if you are eligible.

MattMontreal

Thanks all - very helpful.

FWIW I did apply for the new style JSA yesterday - I'm just waiting for that to process.